answer:Yes, he’s right. Any time you’re doing something ‘special’ (i.e. non-routine) think of all the ways they could screw it up, and plan for that. Meaning: write a separate check for the past due interest, and make sure that it goes in with the past-due coupons. And then check the next day to see that it has been properly applied to the account. Then, as an entirely separate transaction, do the $55K payment, and again, make sure that it’s on the “principal” line of the coupon. Better yet, if you can pay in person (as opposed to mailing the check to a PO Box) do that, so it has a better chance of being applied properly, and you have someone to talk to if it doesn’t. But one question. Given that mortgage rates are in the 2–3% range, and regular bank loans are in the 6–8% range (or higher), are you thinking of the last $20K as a mortgage or a straight bank loan or what? Don’t get a higher interest rate and squander your money,