Let say you’ve been paying on your 30-year amortized $200,000 home mortgage at 5.5% for 3 years. You’ve made monthly payments $1,135.58 for 36 months. The question is this. How much (in approx. dollars) do you think has been applied to your principal amount (principal reduction-your equity)?
Is it: a) $8,500 b) $30,200 c) $24,800 or d) $15,700?
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It wasn’t late at night, nor in a dark alley, nor inside a smoke-filled dimly lite room when it happened. It was in the comfort of their own home. It was only 5 months since they had closed on their new home mortgage. Then one day, a mortgage representative contacted them to say that their home loan was sold and the new lender needed updated information. The representative request was received with some questioning, but because he spoke with such certainty and authority, they yielded to his instructions.
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