Mortgage Payment Coupon and Escrow

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When I make my house payment the part of the coupon that I send with it says any additonal money sent is applied to principal or other. What does it mean OTHER?


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In all fairness, only your current mortgage loan servicer can answer that question with 100% accuracy. The most likely answer to your question is that “other” would be placed in your escrow account for taxes and insurance.

When you closed on your mortgage loan, if it was setup with an escrow account, your monthly payment is divided between interest, principle, 1/12 of your annual property taxes and 1/12 of your annual homeowner’s insurance.

By making a payment for more than the required “coupon” amount shown on the statement you submit with your payment you could elect that additional amount to go towards principal or you could pay it towards your escrow balance for taxes and insurance. Sometimes a homeowner is alerted to an increase in their homeowner’s insurance rates or annual tax amounts prior to the loan servicer. By paying additional into the escrow account now you can ensure there will be enough money in the account when these items are due.

Answered almost 7 years ago
kenstampe
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