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What to do when a family member ruins your credit

Homeownership is possible

What you need to know about the IRS and collection agencies

Will being turned down for a store credit card hurt my credit?

Beware of credit repair

Debt Management versus Debt Settlement

How to get ahead of late fees

Is There a Service That Helps You Not Pay Bills

Is a Debt Owed

Patience is the key to furnishing a new home

How to split expenses with your partner

Will my boyfriend's bad credit affect me?

Tax filing options to consider

What to do if your account is turned over to collections

Celebrating Valentine's Day on a budget

Personal Credit and Starting a Business

Finding Money to Reduce Your Debt and Improve Your Credit

Simple Keys to Personal Finance

Be vigilant to avoid telephone and internet scams

Debt Settlement

Understanding credit utilization

Setting New Year's goals that you can keep

The pros and cons of skipping a payment

Strategies for Financially Surviving the Holidays

Creating a fun and memorable holiday on a budget

Keep an open line of communication with parents about their finances.

Make a Choice to Get Ahead Financially

What to do when a relative asks you for money

Should You Buy a Home Now or Wait?

The difference between debt settlement and debt management

Tax Refund Delays for some in 2017

The negative impact of paying a payment 30 days late

Stressed by Finances

How to navigate two significant financial decisions: starting a family and buying a home

How to advise someone close to you who is coming into a significant amount of money

Make a Conscious Decision on How to Spend Your Money

Tips for Back-to-School Shopping

How do you know if you have a good credit score?

Americans spend more money eating out than on groceries

Having Good Credit Saves You Money

Developing good money habits with your first job

How to save for a home

How to Know if you are Ready for Home Ownership

When is the right time to buy a home?

You can improve your credit to buy a home

Plan a Memorable Vacation Without Incurring Debt

The Hidden Costs of Payday Loans

Be Wary of Credit Repair Services

Use Caution when playing the credit card game

What does it mean to say bankruptcy gives you a clean slate?

How your credit is affected by various debt options

Be wary of predatory small business loans

What to do if you fall behind on mortgage payments

Financing a College Education

Money, Credit and Relationships

Should you be concerned with your date's credit scores?

Best options for a small, short-term loan

How to help a relative who is always borrowing money from you

Setting New Year's goals that you can keep

Making the holidays memorable for families on a tight budget.

Skipping a Payment over the Holidays

What to do if you are overwhelmed by medical bills

Make your financial intention a financial goal you can achieve

Should Consumers Use the New EMV Cards?

What to do when a collector calls you

The difference between paying bills and managing your money

My wife and I have gone through some tough financial times, which eventually led us to file for bankruptcy.  Following this experience, I don’t ever want to use credit again, but my wife

What do I need to know to pay ahead on my mortgage?

What to do if you get an unsolicited credit card in the mail

What to do when moving in to share expenses doesn't work out

What do I need to know to pay ahead on my mortgage?

A.  It’s great that you want to pay extra on your mortgage and reduce the amount of interest you will pay over the life of your loan.  The first thing you need to do is pull out your mortgage documents.  You need to make sure you don’t have any pre-payment penalties attached to your loan. So read your documents carefully to ensure that your loan allows you to make extra payments.  If you are unable to locate your mortgage loan documents, call you lender. 

The easiest way to make an extra payment is to add it each month to your monthly payment.  Your lender should allow you to dictate how you want the extra money to be applied.  If you aren’t explicit, your lender will probably put the money into your escrow account. So if you want the extra amount to be applied to principal, you need to say so. 

If you are making your payment online, many lenders make it easy for you to add the extra amount and state how you want the extra applied.  You can save thousands of dollars in interest on a mortgage loan by paying an extra $50 a month on your loan. You can increase or decrease the extra amount you pay each month, as long as you make the full monthly payment. 

Some lenders offer a special program or service where you make a payment every two weeks, and it is applied to your mortgage.  There is often an enrollment fee for this kind of a program.  To make this work, you will have to make half a payment two weeks before your total payment is due and the other half by the payment date.  In essence, you will be making your payment early.

You need to make sure the payment is applied every two weeks to your mortgage and that it isn’t sitting in an escrow account until the full payment is available. Recently, Paymap Inc., a Colorado payment processing company, was fined a $5 million and ordered to pay $33.4 million to consumers who had entered their Equity Accelerator Program. 

Paymap withdrew money every two weeks from consumers’ accounts but did not send the payment immediately to the lender. Instead, Paymap put the money in a custodial account and paid the mortgage on the original monthly schedule. Consumers paid $295 to enroll in Paymap’s program, but didn’t save money on their mortgage, as promised. 

If you opt to enroll in a service that handles your payments, you need to make sure those payments are applied to our loans as they are supposed to be—having online access to your accounts can make this easier than it once was.  

As long as your mortgage loan allows you to make extra payments, any extra money applied to your principal will reduce the total interest you will pay.

Bonnie Spain is the executive director of the American Center for Credit Education and Consumer Credit Counseling Service of the Black Hills. For more information, email acce@acce-online.com.

The material in this transmission is provided for personal, non-commercial, educational, and informational purposes only. ACCE makes no representations or warranties with respect to the accuracy or completeness of the contents of this transmission and assumes no responsibility for errors, inaccuracies, omissions, or any inconsistency herein. You should consult a professional where appropriate.