Thursday, May 19, 2011

It Helps To Talk To A Human

I called my bank today and asked them about the methods for paying off a mortgage. My mortgage holder and my bank are the same so you would think it would be easy to do. The special recording set up for requesting payoff quotes said that I have to send a cashier's check and the payoff quote to a certain address. I called back and pressed "0" to talk to a human. I asked the Service Rep. if I could just pay down my mortgage and then let the automatic payment that is scheduled for June 1st, pay off the rest of it and then it would be done. He said that it would take much longer that way because the computer wouldn't be able to close the loan. The computer would have to recognise that no more payments were needed (probably when it tried to do the July payment) and then it would trigger the loan closing department (located at the special address where I have to send the payoff quote) to close the loan.

The Rep. recommended that I go to a bank branch and have them transfer the funds from my bank account and then (I am assuming) fax the payoff quote. That sounds better than mailing it because I was worried that it wouldn't get there in time and the automated payment would take another $800 out of my account for June and I really don't want to loan the bank $800.

Only 6 more days until payday and rent day!


laura @ move to portugal said...

It makes sense to go to a branch..I wouldn't trust the mail, so close now Daizy! :)

The Executioner said...

Be sure to cancel your automated payment when you pay off the loan!

Dave said...

Is there really a problem with the official loan closing taking longer if you did what you were going to do (let the automatic payment for 6/1 pay off the remaining part of the loan)?

After all, think about all the loans which are simply paid off on schedule with the last ordinary payment completing the loan with no payoff notice needed. You would in effect be doing the same thing.

Do you have a payment book or coupon which specifies the option of including additional principal with any loan payment? Just send them a check for just under $800 less than what you owe right now.

And you can sever the automatic payment at any time, right? Make a big payment now to get you to just under $800 away from paying off the loan (remember there will be some interest still due in your amortization). Then sever the automatic payment some time in June after you confirm you have actually paid off the entire loan (or slightly more, with a refund due).

If the bank takes a few weeks to process the June 1st payment and return to you the papers you need along with a possible small refund, so what? The main thing is that you won't owe them any more money after June 1st and you will have severed the pipeline to your bank account.

And you will have saved the $30 faxing fee.

Daizy said...

laura, yes, I was thinking that the mail was going to be too slow anyway since it will be so close to the end of the month. Good to know I have another option.

Daizy said...

Thanks Executioner. I guess I thought it would stop automatically but I certainly wouldn't want to find that out after it takes my money.

Daizy said...

You are right Dave. I don't know how long it would take for the loan to close on its own. I think I will ask the branch about any fees and if there are additional fees when using the branch then I will just let the loan close on its own.