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Dimitry Esquire
Dimitry Esquire, Attorney
Category: Real Estate Law
Satisfied Customers: 41221
Experience:  JA Mentor, multiple jurisdictions, specialize in business/contract disputes, estate creation & admin
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We took out a mortgage on our home monthly payment is 926 paid

Customer Question

we took out a mortgage on our home monthly payment is 926 paid 2000 they applied 668.39 to principal we were told anything paid over the monthly amount due would be applied to principal 1000.00 was applied to interest is this legal in minnesota
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  Dimitry Esquire replied 2 years ago.
Thank you for your question. Please permit me to assist you with your concerns. I am sorry for your situation. Did you owe any sort of outside interest on this mortgage when you wrote the check, or were you completely paid up?
Customer: replied 2 years ago.
No that was are first payment
Expert:  Dimitry Esquire replied 2 years ago.
Hi, Most loans are deemed to be 'LIFO', which means 'last in, first out'. This typically refers to interest payments, so if there is an outstanding interest, it gets paid off first before the principal is touched. BUT if no interest is owed, then the funds go toward principal unless your agreement denotes something else in writing. Hence, review the language of your mortgage terms, but if you have the 'LIFO' clause then the actions of the lender are in violation of the terms of the agreement. Sincerely, ***** *****