Common Boston Area Mortgage Mistakes

If you’ve closed on a home and you’re just starting out with a Boston area mortgage on that home, there are some common mistakes you need to be aware of. They generally come down to making sure you clearly communicate what you’re intending to do with the money you’re sending in for your Boston area mortgage.

Common Boston Area Mortgage Mistakes Many People Make

Here are some Boston area mortgage mistakes many people makeSending in extra money without explaining what it’s for

Not that your lender will complain if you send in extra money, but there are a few different things you could be doing – prepaying before going on vacation, paying down your principal or adding money to your escrow account. Without telling your lender why you’re sending in extra money, they may not know what to do with the extra funds.

Putting a note in the memo section of your check

You may think you’ve been explaining what your money is for on your check, but depending on who processes your payment (e.g. a bank or specifically mortgage institution), they may not have access to these notes. And when paying online, you may not have anywhere to explain extra payment amounts.

Forgetting to add your loan number on your check

Maybe you have multiple loans with your lender, or maybe a family member is paying on your behalf one month. Either way, it’s best to include the loan number you want the funds to go to, because, unlike notes on your check, whoever is collecting your payments – the lender or the bank the lender works with – will be able to use that information to correctly apply your payment.

Not understanding the difference between recurring payments through your lender and bill pay through your bank

With many Boston area mortgage companies and banks you can set up recurring mortgage payments (sometimes called auto draft or auto pay) or set up bill pay through your bank. Make sure you’re clear on which one you’re using.

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For example, if you set up recurring payments, your Boston area mortgage company will draft your monthly payment for you automatically. If you have online bill pay, your bank sends the money every month for you. The problem is, if your payment changes for any reason (typically due to an increase in escrow, taxes and insurance), your online bill pay will NOT know about the change and then your payment will be under or over the correct amount. On the other hand, a recurring draft with your Boston area mortgage company will account for the payment change and collect the right amount of money.

Get more Boston area mortgage tips and information at our Boston Mortgage Info section of articles to your right under Boston Real Estate Categories.

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