How do I know if I’m being charged too much interest on property I’m buying?

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How do I know if I’m being charged too much interest on property I’m buying?

My monthly payment is 130 and daily interest is taken from that payment and I send an extra payment of 125 the same month and daily interest is taken from that payment as well, instead of being applied to principal.

Asked on February 21, 2019 under Real Estate Law, Arkansas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

Generally, when you send an extra payment, it is treated as prepayment of a later or subsequent payment and not as a principal only payment unless you specifically designated it as a principal only payment when making it. So if you did not specifically indicate that it was principal only, this is how they would have handled it.


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