A blow-by-blow account. Mostly. With optional musical accompaniment.
For the past 4 years, I have been focusing on paying off my mortgage. In fact, I have written about this a few times this year as I get closer: why I want to pay it off, and figuring out what to do with the extra money.
I have been so excited for other bloggers when they write about becoming mortgage-free. Chief Mom Officer paid off her house this spring, and a few years ago, Our Next Life wrote about paying off her house as well. I was thrilled for both of them.
Their reports seemed so tidy: log on, transfer money and voila! They are done with the mortgage. Commence partying!
For better or for worse, I have not been paying my mortgage electronically. My mortgage has been sold 4 times since I took it out. Several of those companies didn’t make it easy to pay variable amounts to the principal, which is important if you want to send extra money only occasionally, like after receiving birthday checks, or bonuses. And sometimes you just want to send the minimum (instead of rounding up) one month because things are running tight.
Therefore, I have been dealing with the old-fashioned system of mailing in a check every month, and then getting a paper statement detailing my remaining principal and the interest. These statements come with a reminder that my next payment is due the 1st of the month and there are extra fees if they don’t receive my check by the 10th (or 15th, depending on the company).
My efforts to finish off the mortgage were not as clean and crisp as those detailed by others. Below you can read the long, drawn-out saga of my quest to be free of my mortgage company. Or, to quote my husband, those lying, thieving, swindling swindlers.
the hopeful beginning
May 1. Excitedly write a very large check to the mortgage company. I don’t pay off the mortgage completely, but the remaining principal is less than the usual principal and interest (P&I) payment for prior months. Next month should be my last payment!
Rest of May. Deal with Dad’s illness. Out of town.
End of May. Get statement from mortgage company, noting large extra payment to principal. Amount due for June 1 is less than usual, as the outstanding principal is less than the prior P&I.
June 1. Pay mortgage company the amount they asked for in their statement.
time of conflict
Mid to late June. A letter from the mortgage company comes. They notice I am close to paying off my mortgage, and are sending a payoff letter. They want me to wire money, and will charge me to receive it. I also have to pay a recording fee. Note that I have already sent in (and they have cashed) a large check earlier in the month.
June 25. Receive a statement from the mortgage company. It does not say: Congratulations, you have paid in full. In fact, they counted my check as a partial payment, which was not applied to the principal. They have credited it to a “suspense balance.”
June 26. I called customer service, and spoke to someone about this. The representative said she would put in a work order to have my money applied to my payoff amount. She offered me congratulations on paying off my mortgage.
June 27. I get a call from collections while I am seeing patients, asking for the difference between the amount I sent June 1 (which I paid as per their statement) and the usual amount of my required monthly payment.
June 28. I call my original lender, who just connects me to the new company. I get another agent, who states that the nice agent from 2 days prior was wrong. I have to send more money.
July 1. I get a new notice for my mortgage. It looks just like my June 1 statement, with the same amount due. Except that I also have money in my “suspense account.”
July 10. I call again, and ask to escalate to a manager. They don’t do that, but send me to customer service, where I talk to another pleasant agent, who has to look into things.
July 11. The very pleasant agent from July 10 calls back, because she has been looking at my file, and states that my mortgage payoff funds can’t come from the money that was sent in June, even though that check was more than the payoff amount. I ask for a new payoff letter.
July 12 . I get a letter reminding me of the protections I have as a member of the military. Except that I am not a member of the military.
mid-July. I get a letter advising me that I am behind on paying my loan. If I am having financial difficulties paying my mortgage, I should contact them about this. I do not call them to point out I’ve already sent in enough money to pay off my loan and don’t consider myself behind on my loan. The same day I also get a letter stating that I’ve contacted customer service and should get an answer in 7 business days.
July 15. I get the second payoff letter I requested, since they clearly aren’t going to use the money I’ve already sent.
July 17. I get to the bank, and send a wire. Thankfully, my bank doesn’t charge me a fee to wire money also.
we emerge victorious
August 6. I receive a paper from the mortgage company: a page from my original loan agreement, with a “Paid” stamp. I put this in my safety deposit box. I probably should have made copies, I expect I’ll need them.
August 12. I finally receive a check for my escrow and suspense account money.
August 26. I receive a letter in the mail with stamps from various governmental offices that my mortgage has been paid off.
The lowdown
Here are some take home points I now have (several months too late for me!) for paying off your mortgage:
- Lenders don’t make it easy for you to actually pay off your mortgage. In fact, I don’t know that they see it that often. Keep your records.
- Sending in checks does introduce an element of delay. It might be smarter to set up an electronic account with your lender, certainly as you get to the end of your term.
- If they offer you a payoff letter, follow those directions. Don’t balk at the fees.
- If they don’t offer you a payoff letter as you get close to the end of your mortgage, ask for one!
- Celebrate the end, once you are really sure your mortgage is dead.
Have you paid off your mortgage? Are you thinking about it?