Question for those who have a Wells Fargo Home Mortgage

[dkdaisy]

This is budget related, I promise!

I've heard that if you send in 1/2 your payment twice a month instead of your whole payment monthly you save interest. Now, I'd like to save up my interest to use for Disney vacations... (see, Disney budget related )

Has anybody done this with Wells Fargo? How do they react? Did you have to call or write a letter to let them know you were prepaying? I asked once and they said that to prepay I should make my payment at the bank and tell them I'm prepaying. I don't have time to go into the bank twice a month to make my mortgage payment.

any suggestions?

I'm sorry if this sounds like a dumb question, but this is our first mortgage and I'm inexperienced....

Thank you!

 

[pjstevens]

This is budget related, I promise!

I've heard that if you send in 1/2 your payment twice a month instead of your whole payment monthly you save interest. Now, I'd like to save up my interest to use for Disney vacations... (see, Disney budget related )

Has anybody done this with Wells Fargo? How do they react? Did you have to call or write a letter to let them know you were prepaying? I asked once and they said that to prepay I should make my payment at the bank and tell them I'm prepaying. I don't have time to go into the bank twice a month to make my mortgage payment.

any suggestions?

I'm sorry if this sounds like a dumb question, but this is our first mortgage and I'm inexperienced....

Thank you!

I do not have wells fargo, but recently refinanced and we too wanted to do this (or to pay online every two weeks) but most mortgage companies will not allow you to do this. You have to have it automatically taken out every two weeks (thus this is where you save interest), you are then making 13 payments in 12 months so the entire 13th one is all principal. There are companies that take care of this and I don't think most mortgage companies do it themselves.

 

[jakenjess]

We've had our mortgage with Wells Fargo for years. They will allow you to set up your mortgage with bi-weekly payments, so you end up making an extra payment per year. It's really painless, and it's worked out great for us. Really cuts back on the interest. Our payments are done by electronic funds transfer, and I'm not sure, but you may have to do that in order to take advantage of the bi-weekly. Give them a call and see what they say. Good luck!

 

[keishashadow]

unless you have a prepayment clause in your mortgage contract that specifically prohibits it, you can always send in an extra payment, at any time, in addition to your mortgage payment

imo, way better than committing to a bi-monthly mtg jik something comes up

i can't remember the exact #; but even sending in 1 extra payment/year reduces your mortgage length by X # of years.

even helps to just add a small amount on each month to the principal

 

[Isi]

I don't know but I have Wells Fargo Financial and every month I send a little extra and the next month my payment is a little less..So I don't understand how they work..

 

[carymomof3]

We have Wells Fargo. I asked about this last year and was told that you have to use their "plan." They charged a fee for this, so I chose not to do it and instead just send extra on my mortgage. So, to answer your question, they would not let us send in half the payment one week and half the payment a couple weeks later. If we did that, they would credit it as an additional principal payment. They said they do not accept "partial" payments so you have to send in at least one payment that is the full amount owed. You can always send extra on top of that. Of course, they'll let you do it if you pay them a processing fee. Hope this makes sense. Just might want to make sure you talk to someone before you go out on your own.

 

[tinaluis]

I don't know but I have Wells Fargo Financial and every month I send a little extra and the next month my payment is a little less..So I don't understand how they work..

You need to let them know that the extra $$ you are sending in is to be applied toward PRINCIPAL. It doesn't sound like it is in the scenario you've described.

 

[pjstevens]

You need to let them know that the extra $$ you are sending in is to be applied toward PRINCIPAL. It doesn't sound like it is in the scenario you've described.

definately! same thing happened here at work. boss was sending in extra and his extra was just being applied to the next payment so he kept getting statements saying his next payment was due further away. it was NOT being applied to the principal automatically.

 

[Kycha]

My mortgage is through Wells Fargo. They do have a biweekly payment plan. They may charge a fee to participate. But, I don't see the need. Basically by paying biweekly you are only making one additional mortgage payment a year. So, I just do it myself and just add the additional payment to my monthly payment.

So, if my monthly mortgage payment is $1200, I divide that by 12 months($1200/12=$100). Then add that as additional principal to my monthly mortgage. Now my payment is $1300 a month. By applying one additional mortgage payment a year to principal can take 8 years off a 30 year mortgage. There is a line to add additional principal on your mortgage coupon.

BTW, if you are still interested in Wells Fargo biweekly payment program, check your mortgage statement. Almost every month they send me literature on this.
Hope that helps!

 

[kmccoy]

Hi,
I have Wells Fargo and you definately can do this. There are several services that they offer free of charge. You can pay every 2 weeks (which amounts to 26 payments per year or one extra payment. This saves quite a bit over the life of the loan. You can also pay half your mortgage on the 15th and the other half on the 1st as usual. This amounts to saving you only about 1000.00 dollars over the entire 30 years of your loan. Not sure which one your were thinking of. You have to call them directly to set either up.

 

[Laxmom]

I looked into this some time back and they charged a fee for this at that time.
I opted to pay enough extra each month to equal an extra payment per year because that is free. Just be sure you put it toward principal.

 

[gilby]

Do not pay your mortgage on line thru wells fargo bank. I did twice and they lost both my payments, then came back and said it was late. They didn't have a problem taking my mortgage out of my wells fargo checking acct.
From now on I walk the payment to wells fargo and have never had a problem.

 

[Laxmom]

Thats a great idea if you have one near by!! We don't. They are DH's company's prefered lender; the company paid closing costs if we put our mortgage thru them. I had more problems mailing them paper checks than I ever have online. Matter of fact, I have never had a problem. I print a receipt and hope that I never have to use it.

 

[janey99]

I have Wells Fargo. We don't do the bi-weekly thing because IIRC, they wanted to charge to set it up. Instead, every month, when I send in my paper coupon with my monthly payment, I send in additional principle equal to (one month's mortgage payment/12) which works out to be about the same as biweekly payment. There should be spaces on your paper coupon where you specify the total amount you are sending them, and the breakdown of what it can be applied to. Then, on next month's statement, I can see how they accepted my full mortgage payment for the prior month, plus applied my "extra" to principle.

We have just refinanced with WF, and this is true of my old mortgage and my new mortgage.

Unless there are different rules for different products, I don't see why you couldn't do this as well.

Good luck -

Jane

 

[luvmy3]

We do this through WF and it adds an extra payment every year. It takes off almost 7 years of our mortgage. Our payments are automatically deducted from our bank account so I don't have to worry about figuring any of the numbers out. I think this year since we have paid off dh's car and his student loan we will be making another extra payment a year (just mail it in).

 

[EthansMom]

I've heard that if you send in 1/2 your payment twice a month instead of your whole payment monthly you save interest. Now, I'd like to save up my interest to use for Disney vacations... (see, Disney budget related )

As other posters have mentioned, you can send in extra payments toward the principal of your mortgage at any time. Most lenders include a "Additional Payment toward Principal" line item on their payment coupon.

However, by your comment that you want to save interest for Disney vacations I think you may be under the impression that doing so will save you money on payments THIS year, which it won't if you have a fixed-rate loan. Instead, the payments toward the principal will result in lower interest and compound over the life of the mortgage so that you owe fewer payments (pay off the loan in fewer months). If you have a variable rate loan, by prepaying, you would have lower payments when the loan reamortizes (assuming the loan reamortizes to the same or a lower interest rate).

Prepaying your mortgage isn't a bad idea, but it doesn't add up to extra money in your monthly budget. Actually, it's one of the last things most folks should do as far as personal finances.... after being frugal with spending, maxing out 401k accounts, paying off all other debt, and putting money away for college, etc.

 

[dkdaisy]

Thanks for all the advice!

Posted by EthansMom
As other posters have mentioned, you can send in extra payments toward the principal of your mortgage at any time. Most lenders include a "Additional Payment toward Principal" line item on their payment coupon.

However, by your comment that you want to save interest for Disney vacations I think you may be under the impression that doing so will save you money on payments THIS year, which it won't if you have a fixed-rate loan. Instead, the payments toward the principal will result in lower interest and compound over the life of the mortgage so that you owe fewer payments (pay off the loan in fewer months). If you have a variable rate loan, by prepaying, you would have lower payments when the loan reamortizes (assuming the loan reamortizes to the same or a lower interest rate).

Prepaying your mortgage isn't a bad idea, but it doesn't add up to extra money in your monthly budget. Actually, it's one of the last things most folks should do as far as personal finances.... after being frugal with spending, maxing out 401k accounts, paying off all other debt, and putting money away for college, etc.

I know that I won't get extra in my monthly budget. I just added in the part about saving for Disney vacations so it would be relevant to the board (per the mods thread last week about OT threads).

I do have one more question though. A lot of you mentioned paying extra with your monthly payment through the paper form. However, I pay all my bills online and when you utilize that there isn't an extra line for additional principal payment. Has anybody tried to pay extra with each payment online and had it applied directly to their principal?

Thanks!

 

[Laxmom]

I have but it was before they redid their website. I haven't looked lately - college tuition and no extra to send!

 

[janey99]

Thanks for all the advice!



I know that I won't get extra in my monthly budget. I just added in the part about saving for Disney vacations so it would be relevant to the board (per the mods thread last week about OT threads).

I do have one more question though. A lot of you mentioned paying extra with your monthly payment through the paper form. However, I pay all my bills online and when you utilize that there isn't an extra line for additional principal payment. Has anybody tried to pay extra with each payment online and had it applied directly to their principal?

Thanks!

Actually, because I want to pay some principle each month is the only reason I still use the paper coupon. Without that form to fill out every month, I'm not sure how you would give the instruction on an electronic payment to make sure a certain amount went to your monthly payment and a certain amount went to principle. All my other bills are paid on line through my bank.

If anyone knows how yo do this, particularly with Wells Fargo, I'm all ears - I'd love to save a stamp every month!

Jane

 

[Laxmom]

Ok, I just went to the website. You do have to sign up to be able to make payments online. Usually the instructions are on the website for the payee. On page one, you select whether you want to make an immediate payment from a non Wells Fargo acct, a Wells Fargo account or set up a recurring payment. Select your option there. The next page is where you go over the details of the payment. Farther down on the page is a place to add additional escrow or additional principle.

I usually schedule my payment for my due date when I get my email reminder that my new statement is available. Hope this helps.