The HELOC and 15 day billing cycles

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Cady
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The HELOC and 15 day billing cycles

Postby Cady » Sun May 06, 2007 6:36 am

Hi all.

I posted this in my PFJournal but since I'm looking for advice I thought I'd post it here as well:

Got my first statement from my HELOC which was sold to Countrywide Bank. It is a 15 day billing cycle.
It is an interest only payment. WTF! Wow.

And they charge $4.00 per transaction to auto deduct from your checking account!! WTF!!!

I have to pay them for the privilege of getting paid on time?
I have to pay them to have direct access to my money?
I have to pay them to NOT have a clerk in a basement to process my check?

OK! I have new incentive to pay the HELOC off ASAP.

Well so does anyone out there have this 15 day billing cycle on their mortgage?
Is this unusual? How can I work it to my advantage (assuming I have any advantage?)
This is an ARM as well. It is for $27,700. (It was my 20% down. The big one is 30 year fixed.)

I should add that all of the above is from my reading the fine print on their web page.
I haven't talked to anyone there yet. I will Monday morning first thing.

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jdroth
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Postby jdroth » Sun May 06, 2007 11:25 am

I'm confused. A 15-day billing cycle? Does this mean they're billing you <i>twice</i> a month?

Countrywide's a big bank, right? Big banks make me tense. I used to do a lot of business with US Bank, but they drove me nuts with their bureaucracy and their fees. I left a few years ago. I just read that their latest initiative is to get employess to wear uniforms. They think that'll improve customer relations. Stuff like this makes me cry. :cry:

I'm curious to hear updates on this, Cady.

Cady
Posts: 134
Joined: Tue Apr 17, 2007 1:37 pm
Location: Gulfport, Florida
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Postby Cady » Sun May 06, 2007 1:48 pm

They are stating that they are doing the borrower a favor. By paying every 2 weeks you end up with an extra month's payments at the end of the year.

But since this is an interest only payment they end up with an extra month's interest from me. It's a good shakedown. I've also been thinking that it feels like I should be able to work the daily compounding in my favor since it is accrued every 15 days. I can pay the day it is billed and send $100 to the principle every 15 days. I don't know the math to back up this hunch though.

Cady
Posts: 134
Joined: Tue Apr 17, 2007 1:37 pm
Location: Gulfport, Florida
Contact:

Postby Cady » Mon May 07, 2007 1:02 pm

Well I just got off the phone with them. The 15 day billing cycle is just for this first payment since I closed on the 16th of April. When my next statement comes in it'll say 30 day billing cycle. The autopay fee is waived for the 12 payments a year option on my loan. I don't know if they waived it because I called in or not.

So I set up an automatic prepayment to principle of $125 every month on top of the miminum whatever. Since it is an ARM I'll watch it closely. Quicken has told me to send $3000 on Oct 1st and Apr 1st as mortgage gifts on top of the $125 prepayment. The $27,7000 25-year ARM will be paid off August 1st 2010.


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