Mortgate interst

[beatsme]

From Missouri -
In reviewing the last three years of our mortgage payments, I think the bank has calculated the interest due wrong.
I asked the bank about this and their answer does not seem to be correct.
This is a simple interest mortgage loan.
Our payment is due once a month, but I generally make a full payment(or more) about every 3 weeks.
I thought they should calculate the interest due each month based on days between payments. Such as 21 days between payments equals 21 days interst due, not 30 days.
The formula they are obviously using is loan balance x interest rate =annual interest, divided by 12 = interest due, regardless of the fewer days between payments.
Who would be correct?
Thanks

 

[HomeGuru]

From Missouri -
In reviewing the last three years of our mortgage payments, I think the bank has calculated the interest due wrong.
I asked the bank about this and their answer does not seem to be correct.
This is a simple interest mortgage loan.
Our payment is due once a month, but I generally make a full payment(or more) about every 3 weeks.
I thought they should calculate the interest due each month based on days between payments. Such as 21 days between payments equals 21 days interst due, not 30 days.
The formula they are obviously using is loan balance x interest rate =annual interest, divided by 12 = interest due, regardless of the fewer days between payments.
Who would be correct?
Thanks

**A: I really can't tell you. You need to read your mortgage and note to see what was actually agreed to.

 

[HUD-1]

Read your Note carefully. Any standard Note will require a payment by the 15th of the month. The P&I payments are set whether you pay on the first, the tenth or the 15th. If your payment arrives early, there is no discount on the interest due. I have never seen a Note that varies in the amount of interest due based on the exact day the payment is received. This would be an accounting nightmare. (Also, I beleive interest is paid in arrears, meaning you are paying for last month's interest due, not for the current month)