Question about Payments

[Lalita]

I just have a few questions that I hope you guys can help me with. When we signed with our guide we put down 10% and told him when we got home we would send him an money order for $5000 more. How does this affect are monthly payments? Do they take that five thousand and that recalculate our monthly payment? Or are we still going to be paying the same amount but it would take a shorter amount. I know the guide said we can pay the amount without penalty. How does affect the intrest part of the payment? I hope that makes sense. Do I have to cantact MS before I send the payment?

 

[diznyfanatic]

I'm not sure about the first part of your question, but I would definitely contact Member Accounting or your Guide prior to remitting payment to confirm the impact on your monthly payments.

 

[Lalita]

thanks for the reply. Does anyone else know the answer to my question I guess I would have to call tomorrow and ask.

 

[RobDoc]

If you have already closed and know the amount of the loan, any additional payments would just reduce the balance - thus reducing the amount of interest on subsequent payments and ultimately paying off the loan faster.

If you are sending an additional amount which will in essence increase your downpayment (and reduce the amount of the loan) your payments should be lower. I'd guess that you have not yet closed on the contract and any additional advance payments would be added to your downpayment amount, but I would call your guide - or Member Accounting - to verify how your financing will be structured.

Please report back what you find out.

 

[tiggerrr]

We purchased back in May and put 10% down. In September, we made a lump sum payment on the outstanding balance. As soon as the payment cleared, the web site, under My Loans, showed a recalculation of how much went to principal and interest each month due to a new lower balance

The payment amount did not change, but more of each payment was going to principal. This loan appears to be like any other compound interest loan I've had where you only pay interest on the current outstanding balance.

 

[mommylo]

We paid an additional $2000 when we came home on top of the 10%. The amortization schedule re-calculates itself. It does not change the monthly payment, however it reduces the amortization period from 10 years to about 8 years. You can see it online after the payment's gone through, which is about 2 business days (if payment by credit card). I change the time frame to view from 1 year(default) to 10 years and that should show you how many payments you have remaining...Hope that helps.

 

[Lalita]

Thanks so much for your help. We have closed on the contract. I did call MS today and they basically told me what you guys just said, that the payment goes towards the principal etc etc. Thanks again for your help.