Your Questions About Check My Mortgage Interest

Ruth asks…

Will calling credit card companies to ask for a lower interest rate work?

I went back to school and had to put some of my tuition on credit cards. When the new credit card laws were passed awhile ago, my interest rates shot up (on Capital One, went from 8% to 19% and I had a zero balance at the time). Interest rates on all of my cards went up. I have never had a late payment and my balances are all less than 50% of the available credit. When they first raised my rate, I inquired about it and was told that if I didn’t agree, then I could cancel my card. I have even noticed on a store account I have (Old Navy) that my interest rate is 24%. When I checked my credit report last year, I had good credit (upper 700s), so I really don’t understand why I have such high interest rates. I have had credit cards for 7 years (I’m 25). So the only thing negative my credit reports have ever said was that I had a short credit history and that I didn’t have diversity in my type of credit (I don’t have a mortgage and such).

So, if I call credit card companies and ask for lower rates, since I have good credit and never a late payment, will they lower them at all? Just feel like I am being penalized for them having to go by legislation that made it harder for them to raise rates, so they did it before it passed.

Thanks to all!

admin answers:

First, store cards almost always have high interest rates, even for folks with extensive credit histories and FICO scores in the 800s.

Second, carrying balances, especially over 30% of your limit, makes you a higher credit risk, even if you have never been late with a payment. If you call CapOne and request a lower interest rate, you probably won’t get it. Pay off that account completely and in about 9 months you’ll get a notice that since you are such a good customer, they have lowered your rates.

Basically, most credit card companies will only lower your interest rates if you do not carry balances.

George asks…

Escrow account. I took my first mortgage a year ago and now paying to the same company?

Both rate and interest as well as Escrow and taxes.
While checking on moving to a different mortgage company they said that I don’t have to have escrow account. Can you explain why I need (or not) it? what are the pros and cons in having it?
(My house is insured through different company)
I’m not sure I understand why I need the escrow, if is just a place where they put the money for the taxes and collect the rate on it instead of me paying it all at once?
My loan is below 80% so basically it is only a place where they keep the taxes? and I just pay it directly?

admin answers:

Most lenders charge it you waive to have an escrow account.
Sometimes they may waive the charge if you’re under the 80% LTV……most often they charge either way…

It’s about 0.25% discount point charge.

Most lenders want to make sure that you’re paying the property taxes on the home..or the county can foreclose on the home …and the bank will lose their money.
Same applies with home insurance…if the house burns down then the bank will lose their money

Carol asks…

Can you make payments to only the principal for student loans?

I am currently re-paying my student loans. I pay every month. This month I sent in an additional check asking that it be applied to only the principal. I was told that any money I send in goes to interest first then the principal.

With mortgages, I know you can send in extra payments that only go to the principal. Can you do the same for student loans?

admin answers:

It’s the same thing. They have some formula for how your payments are applied.

Sending in extra money does drive down your principal, but it only does it according to the formula the lender uses.

John asks…

Paid Mortgage at bank and they lost payment?

2.19.08 I made a mortgage payment at my bank. Usually it takes 1 day to deduct the $ from my account. I waited a week and ‘supposedly’ they are putting a trace to find out what happened. What is my next step I do not want to put a stop payment since I feel I should get credit from when the payment was first made 2.19.08. I could tell the woman at the bank did not want to be bothered.

This 30 year mortgage is less than 1 year so the vast majority of the payment is going towards interest.

I faxed a copy of my receipt to the mortgage part of the bank they said there is nothing they can do because the check has not been cashed.


admin answers:

If it was a clerical error and you have proof the bank that prcessed it is responsible (thats why they are ftc insured) you have proof in a receipt so definatly fight it. Take it to the highest position you can but dont be angry be sensable and they should work with you if they dont stop payment withdraw all your money and close the acount and open a new bank. (use a credit union) In colorado I preffer public service credit union if you have one where you are check them out. PS please give me the best answer than you

Daniel asks…

Possible mortgage shortcut. Is it wise?

My friend is considering a mortgage service with United First Financial. It would set up an advanced line of credit that his hourse payment would be automatically paid from each month. He would also deposit his pay checks into it and pay his bills from it. Supposedly by doing this he will save thousands in interest over the life of his mortgage. Have you ever heard of anything like this and is it a wise move?

You can find more details about this service here.

admin answers:

That looks complicated. I’m a smart person and I dont’ care for complicated things. Why doesn’t he just pay half his monthly mortgage payment every two weeks? That would be an extra payment at the end of the year and shave off about 7 years worth of interest and mortgage term. Most mortgages will allow you to do this without setting up anything special or paying someone the privaledge of doing this for you.

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