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Mortgage payoff logistics
10-25-2015, 06:04 PM
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#1
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Recycles dryer sheets
Join Date: May 2015
Posts: 67
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Mortgage payoff logistics
We're paying off the mortgage. The funds should be available on Tuesday and we just want to get it done. We looked at the payoff statement available on our servicer's website and realized we'd be paying $96.50 in fees
Balance remaining $ 61,769.13
Total amount due $ 61,841.09
Recording Fee $ 10.00
Lien Release Fee $ 21.50
Demand Fee $ 15.00
Mortgage holder's wire Fee $ 25.00
My banks wire Fee $ 25.00
Ok, so the first three are, annoyingly, built into the balance. But those last two are avoidable. The servicer's website has a silly disclaimer about accumulated interest and not paying the total balance online.
What would happen if I just paid say, $61,750 as an ACH from their online interface? That should leave me with a balance of ~$19.13 that I could simply make as my last payment right? Avoiding $50 in wire transfer ridiculousness.
Anyone else gone through the logistics of making that last payment?
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10-25-2015, 06:15 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,370
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Just call them and they should be able to give you the payoff as of a certain date and let you know if you can ACH or just mail them a check and avoid the $50 in wiring fees. Even if you end up overpaying them a little, they will likely send you a refund for any overpayment once they have sorted it all out.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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10-25-2015, 06:25 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
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Fidelity offers a wire service for $10. You can transfer the funds to fidelity via ACH, and wire it from there.
You will likely pay more in interest while waiting for the ACH to clear than the original wire fee.
Maybe the bank will give you a break? A one-time free-be? Match a price?
Can you just mail a personal (or certified) check to the bank for the payoff amount?
Add up the daily per diem and you will likely find that the wire transfer saves money.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
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10-25-2015, 07:47 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
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Quote:
Originally Posted by Senator
Fidelity offers a wire service for $10. You can transfer the funds to fidelity via ACH, and wire it from there.
You will likely pay more in interest while waiting for the ACH to clear than the original wire fee.
Maybe the bank will give you a break? A one-time free-be? Match a price?
Can you just mail a personal (or certified) check to the bank for the payoff amount?
Add up the daily per diem and you will likely find that the wire transfer saves money.
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A cashiers check may be better than a personal check. (it will likley save a day or two). Then send the letter either certified or via UPS/FedEx.
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10-25-2015, 10:01 PM
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#5
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Recycles dryer sheets
Join Date: May 2015
Posts: 67
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Quote:
Originally Posted by Senator
Fidelity offers a wire service for $10. You can transfer the funds to fidelity via ACH, and wire it from there.
You will likely pay more in interest while waiting for the ACH to clear than the original wire fee.
Maybe the bank will give you a break? A one-time free-be? Match a price?
Can you just mail a personal (or certified) check to the bank for the payoff amount?
Add up the daily per diem and you will likely find that the wire transfer saves money.
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Yeah, I'd actually pay ~$20 in interest waiting for the ACH to clear.
I also just noticed that while PHH is the servicer on the loan, Wells Fargo actually owns it now. I wonder if I can just go into a Wells Fargo branch with a cashier's check and handle this?
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10-25-2015, 10:07 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: St. Louis
Posts: 2,179
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Quote:
Originally Posted by orangehairfella
I also just noticed that while PHH is the servicer on the loan, Wells Fargo actually owns it now. I wonder if I can just go into a Wells Fargo branch with a cashier's check and handle this?
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Same reason you can't just go into any other business with multiple subsidiaries and get service - they have a dedicated processing center to handle payments for their mortgage division. Their mortgage division isn't their retail banking division. Their branch would likely have to mail it to the processing center anyway.
Plus, would you really want to trust some random bank teller to accurately process your $60,000 check and have it credited properly and correctly (which I doubt they even could...but assuming they could....)
__________________
Dryer sheets Schmyer sheets
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10-26-2015, 05:49 AM
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#7
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Full time employment: Posting here.
Join Date: Mar 2011
Posts: 534
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I did something just like you propose - I made a large, six figure payment on my mortgage using a personal check and a payment slip from the loan book. Then after it cleared I called the bank to get the payoff amount which was then tiny. They were chill about it and accepted a personal check for the payoff.
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10-26-2015, 06:33 AM
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#8
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Moderator
Join Date: Apr 2012
Location: San Diego
Posts: 14,212
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I think Schwab waived the wire transfer fee for me when I paid off my mortgage just before retiring.
Unfortunately for me - I was paying it off right as the mortgage was being sold from the original lender to another lender and both parties denied receiving the money or record of the transfer. Fortunately, wire transfers, paper receipts of the transfer, etc were able to prove the payoff... but it took about a month to resolve.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 6%, rental income 20%
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10-26-2015, 07:09 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Oct 2010
Posts: 1,225
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Quote:
Originally Posted by orangehairfella
I also just noticed that while PHH is the servicer on the loan, Wells Fargo actually owns it now. I wonder if I can just go into a Wells Fargo branch with a cashier's check and handle this?
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This is basically how I paid off my mortgage. It was held by Wells Fargo. I went to my local branch and told the teller what I wanted to do. They assigned a personal banker to me who walked me through the process, setting up the money transfer.
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10-26-2015, 08:40 AM
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#10
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Recycles dryer sheets
Join Date: May 2015
Posts: 67
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Quote:
Originally Posted by jimbee
This is basically how I paid off my mortgage. It was held by Wells Fargo. I went to my local branch and told the teller what I wanted to do. They assigned a personal banker to me who walked me through the process, setting up the money transfer.
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Interesting, I saw a bogleheads thread with several others that had done the same thing, with varying success. Was Wells Fargo just the holder of the note, or were they also the servicer? Maybe I'll ride my bike over to the branch today and talk to a banker.
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10-26-2015, 09:06 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Jul 2012
Location: Texas
Posts: 3,024
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I paid off our mortgage a couple years ago. The mortgage company website allowed you to create a payoff statement as of a certain date. I chose about 3 or 4 days in the future and wrote down the specific amount. They had no fee for an incoming wire, just a small recording fee. I then called my bank and arranged a wire transfer for the payoff amount to occur on that specific date. Their charge was $20 for the outgoing domestic wire transfer. Everything went like clockwork.
The bank told me I could also write a check or do an ACH to avoid the wire fee. But the only way they could guarantee the timing was with a wire transfer. They told me the ACH takes 2-4 days. So I figured I could calculate the payoff 5 days out and likely receive a refund for a day or two of interest. I decided to keep it clean and spend $20 on the wire. If it had been $50 like OP, I might have done the ACH.
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Retired at 52 in July 2013. On to better things...
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10-26-2015, 09:26 AM
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#12
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Thinks s/he gets paid by the post
Join Date: Oct 2010
Posts: 1,225
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Quote:
Originally Posted by orangehairfella
Interesting, I saw a bogleheads thread with several others that had done the same thing, with varying success. Was Wells Fargo just the holder of the note, or were they also the servicer? Maybe I'll ride my bike over to the branch today and talk to a banker.
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Wells Fargo was the mortgage servicer. I did initiate a mortgage payoff process on Wells Fargo's website, but chickened out.
I've seen too many poorly done websites to trust it, so I did not finish using the website and visited the local branch office. There weren't any additional complications that I can remember. I also have a Wells Fargo checking account, that may have simplified the process.
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10-27-2015, 11:48 AM
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#13
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Confused about dryer sheets
Join Date: Oct 2015
Location: USA
Posts: 8
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I just joined the forum today, but I have been lurking for many years. I never really felt I had much to contribute, but I had to weigh in to this topic, because I think I have some info that can save forum members who are paying off their mortgage a few bucks.
I paid off my mortgage a few years ago, it was being serviced by Wells Fargo. I happened to know someone at the company that knew how things were calculated, and she explained it to me. I was shocked at what she told me, but I kept track of all my payments and calculated the interest as per how she told me it would be and it came out exactly right down to the penny. I am pretty confident that the way interest is calculated was not unique to WF, I am guess it is probably standard throughout the industry and dictated by language in the mortgage note.
When the bank calculates interest, they take your principle balance, on the first day of the month, and multiply that by the annual interest rate on your mortgage /12. Then they add that amount of interest to your loan.
The key here is that they use the outstanding balance on the first day of the month. This means if you make an extra payment towards principle on the 2nd day of the month, or the 30th of the month it doesn't matter the amount of interest you pay will be the same. So the moral of this is if you want to make an extra payment towards principle you should make it at the end of the month.
Now when it comes time to pay off the mortgage they do things a little differently. At payoff day, they take your current balance and pro-rate the interest depending on what day of the month you are paying it off on. Notice I said they take the current balance, they do not look at what the balance was at the beginning of the month. In other words, if you have a $10,000 balance at the beginning of the month, pay $9,900 on the 5th of the month, and then pay off the mortgage on the 10th, they would figure your last months interest as 10 days interest on $100. It may seem crazy, but this is how they did it for me.
As another really cool feature if your mortgage is serviced by Wells Fargo, like mine was. (If it is serviced with another bank I would see if they have this ability too.) The banks computers is hooked into the Mortgage departments computers, so you can ask the teller for your current mortgage balance. You can also make your currently monthly mortgage payment, and extra mortgage principle payments any day you want. You can even pay with cash if you want to. No need to talk to a banker, just go right to the teller.
I don't remember for sure on the very last payment, but I think the teller gave me a payoff quote. If she didn't then I probably got the pay-off quote on line, and then took that in to the bank and paid the teller. I do remember the teller congratulating me on paying off my mortgage.
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10-27-2015, 12:09 PM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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If your balance is high enough your bank should waive the wire fee - When I pay off mortgages I just pay what they tell me cause I'm a lemming...
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You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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10-27-2015, 12:54 PM
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#15
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Recycles dryer sheets
Join Date: Nov 2013
Location: baton rouge
Posts: 141
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congrats on the payoff!
I remember doing mine, and how relieved I felt once the
transaction was completed. There's no feeling quite like owning your house
outright. Hope you get the same rush as I did!
My sister in law, a mortgage specialist, advised against holding a mortgage burning ceremony-she preferred that I keep all paperwork associated with the mortgage.
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Prepare today for the demands of tomorrow. Plan your move.
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10-27-2015, 01:05 PM
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#16
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Full time employment: Posting here.
Join Date: Jan 2011
Location: Southern Maine
Posts: 672
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Quote:
Originally Posted by Big_Hitter
If your balance is high enough your bank should waive the wire fee - When I pay off mortgages I just pay what they tell me cause I'm a lemming...
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reminds me of what I did when I bought my house... I had to get a certified check to bring to my closing of about $300k... Went to my bank and they told me there would be a $20 charge for the check... So, I told them, no thanks, I will just pick up the cash tomorrow. They brought in a supervisor who immediately said "Let me give you a free check this time"
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10-27-2015, 03:23 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2013
Location: Limerick
Posts: 5,655
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I paid off my mortgage 5 years ago by wiring the funds. I was so happy to be completely debt free I didn't care about the $20 wire fee. Chase Mortgage didn't charge me to record the mortgage satisfaction document and sent a letter of congratulations. I was able to verify online the document was recorded.
Sent from my iPhone using Early Retirement Forum
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10-27-2015, 03:46 PM
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#18
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gone traveling
Join Date: Sep 2013
Posts: 1,248
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Quote:
Originally Posted by jon-nyc
I did something just like you propose - I made a large, six figure payment on my mortgage using a personal check and a payment slip from the loan book. Then after it cleared I called the bank to get the payoff amount which was then tiny. They were chill about it and accepted a personal check for the payoff.
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Same thing with me. It was just an ordinary check send in ordinary envelope with standard postage.
I slightly overpaid and they mailed me check for difference back.
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10-27-2015, 05:28 PM
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#19
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Recycles dryer sheets
Join Date: May 2015
Posts: 67
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I ended up just wiring the money like a sucker. When it came down to it I didn't want to mail a check that big, and there were some bogleheads horror stories about servicers refusing huge ACH payments...but sitting on them for a week or more before rejecting them. Between the possibility of accumulating interest and the mental anguish that the delay would cause me, the wire felt worth it.
But now its done and we're once again debt free. Took 3 years, 11 months.
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10-27-2015, 05:46 PM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Posts: 11,401
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That's what I would have done. Congratulations!
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