In 1986 my husband, John, and I refinanced our mortgage with Onondaga Savings Bank. The bi-monthly payments were taken out of our checking account. Over the years we paid a little extra every once in a while on the principal. Our goal was to have the mortgage paid off before John retires.
In October 2001, we received a call from the bank (no longer Onondaga Savings) and were informed that an error had been made back in 1986! The bank had been taking $180.94 every two weeks from our checking account. According to the original contract, that amount should have been $190.84. Believe me, $9.90 every two weeks for over 14 years adds up!
You see, we are like most other people. We never checked the amount against the contract because “banks don’t make mistakes.”
So, we owed them almost $4,000 in principal to get the mortgage back on track; but we had overpaid the interest so they owed us money—about $3,900 they said. I asked for an original amortization schedule and one assuming the right payment had been made over the years. I am glad I asked because there were errors on these schedules!
After several conversations with a bank representative and receiving the 14-plus-years payment history, I went to work on this schedule to verify the bank’s figures. My reasoning was that they had made one mistake, they could make another.
The bank representative corrected the errors in the schedule and called me with the final figures. She said that the bank owed us $3,900 in interest. (I do not remember the exact number.) My figures showed that the bank owed us over $4,400. We went over the schedule year by year and found that my figures were indeed correct.
We applied the money owed to our mortgage and are now better than “on track.” the moral of this story is: Banks do make mistakes and auditors do not always audit correctly.
So use this or another mortgage calculator to make sure the information you are getting is correct.