Your Questions About Check My Mortgage Interest

Mandy asks…

If I made a mistake on my 07 return yet the IRS sent my refund, is there a problem?

I used turbotax and I feel that my $2900 refund is a bit high, especially since past years have been around $300-$500. It was my first year for mortgage interest, but if the IRS sends you the check does it mean your in the clear?

I don’t want to cash my check until I am certain its ok and I won’t go to jail for a mistake I and turbotax missed.

THanks.

admin answers:

The mortgage interest may be the reason your refund is bigger this year.

If you want to discuss your return with the irs go to irs.gov and get the toll free numbers. They will be more than happy to help you.

Thomas asks…

Is it normal to be paying more in interest then to principal on a mortgage?

I purchased a house 2 months ago and was checking online at how much I had paid off and noticed that the amount I’ve paid in for interest is more then what i’ve paid down towards the principal. For example, the interest paid year to date on the loan is $550. My loan balance has only gone down by $375. Is this normal? It is a $55,000 loan at 5.998% fixed and amortized over 30 years.

admin answers:

Yes, you will be paying more in interest in the beginning, but with every payment (assuming you pay on time) more and more of your payment will go to the principle until finally you start paying more in principal and less in interest.

If you calculate a full amortization showing each payment for the full thirty years you see how this progresses.

Mark asks…

Does paying off mortgage debt early , will take my interest rate low at the end ?

Here is my scenario, let me know If I am thinking wrong:

– I brought a town home last year
– Home price is 200K
– I have put 20% down (40K)
My mortgage debt was 160K last year
– I had taken 15-year fixed mortgage for 5% APR
– I had seen 5 year ARM rates last year sometime around 3.75%, I did not opt for this.
– From last year I have been paying my mortgage payment every month.
– I had paid extra sum towards principal around 30K

My question is:

1) Let’s say I keep adding some amount to the principal and pay off my full mortgage debt within
5 years. Now at the end of 5 years, if I check as what rate of interest I had paid to my lender,
will I be knowing ?

2) I had choosen the 15 yr fixed, just to be on the safe side, if things change up-side down,I
am better of staying in the 15yr fixed rate (5% APR). But if things go well and I keep adding
more amount to principal , I could pay of the debt in 5 yrs.

Does it make sense to stay in 15 yr fixed and pay off principal -if I am capable of ? all I wanted to know is if I stay in this plan and pay off my mortgage in 5 years, I will still be paying 5% APR at the end of 5 years, and wouldn’t save 1.25% ( 3.75% APR- 5 year ARM) ?

admin answers:

Don’t touch the ARM.
There are PRE-PAYMENT penalties galore – and by galore – I mean expensive as heck.
And… Interest rates could easily double up on your in a couple of years.
Watch CNBC – interest rates could double the interest portion of that montlhy mortage payment.

Before you start paying down your 15 year FIXED rate.
I want you to pay off your cars and any credit card debt.
Also make sure you have at least 9 months worth of emergency living expenses socked away.
A roth could be a good account to use for this emergency money.
But not the 401K or the taxdeductible ira.
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Robert asks…

What happens to a mortgage in case of death?

My mother is really ill (maybe terminally), she has 2 mortgages on 2 houses. I know the mortgages will fall on me if she dies, but will they check my credit and do a new mortgage agreement with new interest rate and such or I’ll just keep paying hers? I’m not in neither of the mortgages, but I’m on the title of one of the houses, in the other title she’s alone. Any help please? Thanks a lot.

admin answers:

Be sure to make the mortgage payments. If your mother passes her estate will be probated. Does she have a will or a trust? If not, it is time to have her get her affairs in order. Without a will her estate could be tied up for months.

As long as the mortgages are paid I don’t think they will do a credit check on you. But please, please be sure your mother has at minimum a will. A revocable trust is better so consult an attorney.

Linda asks…

Mortgage interests refund?

My husband and I only make just under $25000 a year, and since he is retired and doesn’t have to pay in taxes, we know we don’t need to do a mortgage interest deductible. My question though is, does our mortgage company refund us anything on the interest we paid in this year? This is our first full year in our home, and I was researching on here, and saw an answer from a couple of years ago, that says you will get this from your mortgage company in January. Is this true? Last year we got a small check from them with no explanation of the money, and now I see it was probably from the escrow. Could someone let me know if this is right, thanks.

admin answers:

The mortgage interest won’t create a refund.

Overpaying on escrow, meaning their estimate of taxes and insurance was to high is what creates a refund. Chances are they will plan on the taxes going up and will keep it.

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