Is their a limit to how much I can pay on my mortgage?

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Could their be set rules for how much i can pay extra toward principal on my mortgage? I am starting to pay hefty amounts (7-800$ ) in extra principal each month, but I know that my broker said I couldnt pay a certain percentage (like 10%) of the loan amount in one month but scatter it amongst 1-3 monthes. I do not know what he said exactly, but I wonder if its in my mortgage papers…?

I have a 5- year ARM. Loan amount of 125K. no pre-payment penalties after 36 monthes.
thanks for the info!

is their a specific sheet in the mortage paperwork that this info would be on. there is a ton of paperwork
Would my loan company know, or do I need to chase down the broker?

4 Comments
  1. Reply
    lepr0kan
    May 4, 2011 at 1:31 am

    You need to review the mortgage note that you received at closing. if there’s a prepay penalty, which you seem to think there is for the first 3 yrs than there possibly is a limit to how much extra you can pay monthly, but without seeing the note no one on here can tell you the rules within your specific mortgage. In the future never agree to a mortgage with a prepay penalty for any amount of time, it’s not required by lenders and is just a way for brokers and loan officers to make extra money off a borrower.

  2. Reply
    Beverly S
    May 4, 2011 at 2:22 am

    If you are past the 36 month pre-pay you can pay whatever your want towards principle. If you haven’t reached that yet then your pre-payment penalty is probably 6mos. interest on 80% of the balance. That is a pretty common one. Paying 700-800 extra per month you should be fine though. You should have pre-payment penalty rider to your deed of trust and it should either state on the note or you may have a pre-payment penalty addendum to your note which will tell you the details.

  3. Reply
    Jay
    May 4, 2011 at 2:57 am

    Unless your loan places such a restriction (perhaps via a prepayment penalty that kicks in when you’ve “overpaid” a certain amount), there is no law. You can pay 99% of your principal right now, if you wanted and your loan doesn’t otherwise prohibit it.

  4. Reply
    Doctor Deth
    May 4, 2011 at 3:50 am

    only your mortgage company can answer that question

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