Prepayment penalty and interest arrears
Hey All,
I have a question about prepayment on conventional loans. The mortgage loans I'm currently after all state "no prepayment penalty." Say I am a few years into my mortgage and I believe I can pay a little extra on top of my normal monthly payment. If I make my normal payment of say $1500 on the normal due date of the 1st of the month and I decide to pay an extra $1000, this means that $1000 should all go to principal correct? Of course this is assuming no sneaky unpaid interest clause is in the loan despite a "no prepayment penalty" statement.
My second question is this:
If I make my normal payment of $1500 on the 1st and I decide to pay $1000 on the 15th of the same month, the lender would bill for interest in arrears (interest accrued from the 1st-15th) before directing the rest of the $1000 to principal right?
I just want to make sure I am understanding this concept of arrears correctly and to make sure that this is normal when "no prepayment penalty" is stated.
Thanks in advance,
Daniel