PackFan Posted April 13, 2007 Report Share Posted April 13, 2007 Hi folks, I received in the mail a program for my mortgage to pay biweekly instead of monthly a tiny bit more than half what we pay monthly, and this is supposed to help pay down the mortgage more quickly... BUT there is a significant fee to buy into doing this. My question is this: Can't I just do this myself via my bank's bill pay program? Or will the mortgage company not apply the payments in the same way? Thanks for any input! Quote Link to comment Share on other sites More sharing options...
dogbert Posted April 13, 2007 Report Share Posted April 13, 2007 It's completely down to the terms of your mortgage, PackFan. In theory, you should be able to just send them a check mid-cycle & it will work the same as the 'service' they're wanting to charge you for, but often, there's odd terms in mortgage deals about when & what extra payments get applied to. Quote Link to comment Share on other sites More sharing options...
Bruce B Posted April 13, 2007 Report Share Posted April 13, 2007 Hi folks, I received in the mail a program for my mortgage to pay biweekly instead of monthly a tiny bit more than half what we pay monthly, and this is supposed to help pay down the mortgage more quickly... BUT there is a significant fee to buy into doing this. My question is this: Can't I just do this myself via my bank's bill pay program? Or will the mortgage company not apply the payments in the same way? Thanks for any input! My mortgage institution did this transfer for free. Keep in mind that biweekly does not mean twice a month. You will end up making 26 payments in one year, not 24. I'm assuming the term of your mortgage went down. Quote Link to comment Share on other sites More sharing options...
PackFan Posted April 13, 2007 Author Report Share Posted April 13, 2007 Yes - I realize that means 26 payments a year - not a big deal... Should I call and ask? Or just try paying it this way and see what happens? I would end up paying at least my normal amount each month this way. Quote Link to comment Share on other sites More sharing options...
General Zot Posted April 13, 2007 Report Share Posted April 13, 2007 It's a scam man, you can pay it yourself. Unless you have some sort of super restrictive car-loan mortgage that disallows pre-payment (95% chance you don't), then you can make any payments you like. Pay them every day of the week, as long as they get that amount by that time of month they are happy. I would suggest just overwriting your monthly check by whatever you can spare. Long term it'll have the same effect. So an extra $10-50 each month can turn 30 yrs into 22 yrs. But those companies are scams. They want you to pay them a fee for something you can already do for free (without them involved.) But it's not illegal, so the govt can't shut them down. Quote Link to comment Share on other sites More sharing options...
GreenMonkey Posted April 13, 2007 Report Share Posted April 13, 2007 biweekly = 26 half payments a year which = 13 payments You can just take the extra payment, divide it by 12, and add that much extra onto each payment. Same thing. That's what I've heard advised for folks that want the bi-weekly payment thing without the extra fees or hassle. Like me, it would be -> $825 payment divided by 12 payments = $68.75 extra per month which would equal $894 a month. I don't do it, if I had extra money, it would go towards higher interest debts (like credit cards or car payment). Quote Link to comment Share on other sites More sharing options...
General Zot Posted April 13, 2007 Report Share Posted April 13, 2007 Yeah, that's the smart way to do it. No use racing headlong after a 7.5% mortgage (that's also tax deductible) if you have CC debt that is revolving at 20%+. House debt and school debts are OK IMHO, car loans are a neccessary evil, CC debt and others are extremely dangerous and should be minimized ASAP. Quote Link to comment Share on other sites More sharing options...
PackFan Posted April 13, 2007 Author Report Share Posted April 13, 2007 Well, we, as a rule, have no credit card debt, so it's the mortgage, car, and school loans. The last 2 times we moved, we were burned by not living in the houses long enough, so we built very little equity. That combined with bad market timing made us lose money on both houses. That's why I'm looking to see if we can pay down the principal a little faster... Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.