Posted by David Butler America’s Note Network on April 29, 2000 at 19:08:04:
Hello Ray,
I can’t honestly recall, but I don’t know if they would be worth mentioning, unless they are free.
There are literally hundreds of ways to rework amortization schedules. As a private note holder, I use all kinds of methods and various schedules to persuade note payors to pay down the loan sooner so I speed up the recovery on my discount and realize a higher yield.
With institutional lenders, it can be an iffy thing. Most aren’t set up to deal with anything other than their normal program schedules, and they have a hard enough time keeping those straight! Funny thing too, I don’t ever recall seeing an inaccurate loan balance in favor of a borrower!!!??? And it gets worse when the lenders are handling the impound reserves for your R.E. taxes and insurance payments.
I often suggest to clients that if they want to speed up the amortization of their loans, they can simply add additional principal payments to their monthly mortgage payments. This is usually best done in increments of $25, $50, $75, $100, etc (easier to track, and find the lender’s inevitable errors down the road); or in matching payment amounts. Some people simply send in one extra payment per year, others send $500, $1,000 or similar, each year out of their income tax refunds.
There is a cornucopia of ways to bring down a loan ahead of schedule… personally, I think it is a poor use of funds in most situations, but I suppose that depends on the interest rate on the loan, and the comfort level of the Payor.
Hope this helps.
David P. Butler Vice President, Broker Relations