Anyone try bi-monthly mortgage payments?

PennyPincher · #1 (**permalink**) 03-03-2005, 06:59 AM

After reading the thread on putting extra money toward mortgages, it made me think of something many mortgage companies offer. They have accelerated programs whereby you pay your mortgage every two weeks, instead of once a month.

It does two things ~ it gets an extra payment in each year, and it reduces interest because you are paying it more quickly. I've been hesitant to set this up because I think there is a fee. Right now, I just put extra toward it each month, but I'm wondering if this program would be worth it.

Anyone have experience here????

terry1156 · #2 (**permalink**) 03-04-2005, 11:41 AM

Don't go through the programs the mortgage compnaies offer!!! They are a total rip off.

You can do the same thing for free with a lot more flexibility. <A HREF="http://www.savingadvice.com/forums/showthread.php?t=30">Read This</A> and it will tell you how to do it on your own.

After we finished paying off our credit cards, we started to add extra money with every payment on our mortgage. Since we were doing it on our own, we could add a lot when we wanted, and a little when things got tight. We shaved 9 years off our mortgage doing it this way.

PennyPincher · #3 (**permalink**) 03-04-2005, 01:03 PM

Thank you. I had called the company yesterday very skeptical and asked point blank if there was any difference between paying an extra 1/12 principal each month vs. a bi-monthly payment. She was VERY straight-forward and told me that there is no difference. (well, except from the fees they charge!) She said that their service is a "budgeting tool". So basically, if someone has trouble budgeting on their own, they are encouraged to pay MORE for someone to help them get on a schedule. This is bloody crazy!

Obviously, I will be sticking with my original play of paying 1/12 extra per month. Egads.

Thanks for your reply too.

Armywife · #4 (**permalink**) 03-04-2005, 02:51 PM

Quote:

Originally Posted by terry1156

Don't go through the programs the mortgage compnaies offer!!! They are a total rip off.

Ain't that the truth! My mortgage loan was bought by another bank recently and they tried to get my husband into the bi-monthly program... luckily he decided not to do it. The charge 200.00 SET UP FEE for this "program". Geez... you'd think the exorbitant interest would be suffice... ughhhh!

Miz Pat · #5 (**permalink**) 03-04-2005, 02:54 PM

Wow I love the advice we get here! I hereby send mental flowers to everyone.

I was listening to a radio program yesterday on the way to work. A man said that we have more money now and more things and are less happy in America because we have watched too much television and want to have what those rich people on tv land have.

Isn't that the essence of frugality - You don't let advertising and the Jones determine your life style. You determine it and you set up your goals and you become happy because you did it for yourself.

Miz Pat

JLP · #6 (**permalink**) 03-05-2005, 01:09 PM

I think BEFORE I paid extra on a mortgage, I would first look at the interest rate I was paying. In my mind it doesn't make sense to bust your rear paying off a low interest rate mortgage when you could put that extra money to work somewhere else.

JLP

byusteeler · #7 (**permalink**) 03-16-2005, 05:51 PM

I guess I am lucky. My credit union put us on a bi-weekly mortgage schedule which worked well as my husband is paid bi-weekly. There were no fees associated with this service It is just something they offer if you wish to have it. Never ever pay a fee for this. Some companies charge like $250 to set up the program and then a bi-weekly administration fee of like $2 per payment for "extra cost of posting the additional payments". Also, Don't pay someone 2000-3000 dollars to help you set up a debt stacking program to get out of debt. If you have the discipline to do it, do it yourself. If you don't have the discipline you are likely to incur more debt anyway thus negating the benefit you just payed a few thousand dollars for.

robex · #8 (**permalink**) 08-13-2005, 11:20 PM

I live in Canada and we don't get tax breaks on our mortgages, so paying it off early benefits us in the long run.
We pay our mortgage weekly which is the equivalent of one extra monthly payment each year and have always paid more each week than our actual payment. We do not pay extra penalties or charges for this, and it has sure made a huge difference in the length of our mortgage. We recently re financed when dh quit his job and went from a 400 weekly payment to 150--we would not have been able to do this if we had not paid off the amount that we had.