I would still like to pay my mortgage off 5-6 years earlier, but I’ll have to give this more thought.

Paying your monthly every 2 weeks in 2 payments make a lot of sense financially. You end up saving interest on interest over the term of you home loan. This is significant money folks!

If you existing home loan bank doesn’t offer this possibility, well, you should really think about moving to another one because you’re simply giving them too much money. Think about it; if they don’t it’s simply they want you to pay them more. And that’s not a good deal for you.

Andy.

Also, by paying bi-weekly, what you are doing is simply making more payments a year than if you paid monthly. If you took that extra payment at the end of the year and use it to reduce your principal, you will pay off your mortgage slightly faster.

Sometimes all it takes is writing “apply to principle” on the check but other times you need to send the payment somewhere different. Make sure you check with your lending company before you send in extra payments.

Every two weeks, when my paycheck gets direct deposited (I acutally initiate it the day before), the $$ amount of 1/2 my monthly expenses gets sent in. Then on the 10th of every month my mortgage gets paid, but since my mortgage holder (Wacovia) doesn’t take 1/2 payments, I pay the 1/12 amount extra. Over the course of the year 13 payments are made.

I have been kind of generous with the 1/2 $$ amount so I have actually been accumulating extra in this account. I might be able to add a 14th payment soon.

Couple of problems people always ran into:

Most of these plans require you to set the plan up with $$ BEFORE they send the first monthly payment to the mortgagee; SO, you need the equivalent of 2 mortgage payments to get started: one to keep you mortgage current, one to set the vendor up.

These vendors never explained that very well, so 60% of the people who signed up for the program were one month behind on their mortgage from the get go; I know this because SR management asked me to run a query to find a link between subscribers to the service and loan delinquency

As Chris has illustrated above, mortgage companies do not accept partial payments, so before long these people were several months behind on their mortgage when (or if) they ever figured out how they got behind. By the time they paid late fees, an extra payment to catch up and all the other issues, it cost some people serious $$ and a few never caught up.

Behind the scenes, the vendors would be making the same 12 month payment schedule plus 1/12 extra every month. The same thing an organized person could have done without paying the $400 set up fee. In fact if every person had just paid the $400 towards principle and budgeted an extra bit every month, they could have saved much aggravation and ended up ahead.

Also, what do you do if your employer changes your paycheck schedule or you switch jobs to someone who pays bi-monthly or weekly?

Not a great service.

bi-week-ly
1. occurring every two weeks.
2. occurring twice a week; semiweekly.

As a result, our mortgage debt is dropping quite quickly. As it is far and away our highest interest rate it makes sense to apply our spare money each month against it. Our only other debt is student loan debt.

(5) Put some extra money anywhere – high-yield savings account, stock market, bonds, etc. As soon as you have the amount of your remaining principal, request a a pay-off figure (which they claim will not be the same as the remaining principal, but it really is–I requested one and there were no added fees or anything) and then pay it. Or don’t pay it, but know that you could.

It doesn’t look like much at first, but check this out: link

An Excel template where you can see the effect of extra payment on interest and the amount of time you will pay, etc. I’ve been advocating this template every occasion I get cause I love it!

Nice, Eh?