Bi-weekly morgage

[daveman]

If so who do you go through to do this? I see many online companies, just wondering if anyone knows who is the best.

Thanks
David

 

[Vette73]

ANYBODY cab do a Bi-weekly morgage. It is juts how often you make the payments.
As for a morgage company, sorry I can;'t help there.

But DO setup your morgage in bi-weekly payments. Its does help and you pay no more then you would at a montly payment.

 

[tranceport]

Bi Weekly only helps you because it is like making one full payment that only goes to principal every year.. I would just do this on your own rather than paying some company to do it for you and them charge you 300+ dollars to do it..

I just always put 50 to 100 dollars extra in my payments.

 

[rahvin]

Don't fall for anyone trying to sell you a biweekly mortgage "plan". You need to do some research to understand what bi-weekly payments really are IF they are done right. A true biweekly plan reduces paid interest each month, the scam plans are nothing more than an extra mortgage payment per year and they hold your money interest-free for you.

Contrary to what Marlin said the bi-weekly plan does cost more money out of pocket. A biweekly plan whether it's a real one or a scam one does result in an extra payment per year which does effect your out of pocket money. Although the money is applied to the mortgage that hit can break some people's finances.

 

[daveman]

Originally posted by: Marlin1975
ANYBODY cab do a Bi-weekly morgage. It is juts how often you make the payments.
As for a morgage company, sorry I can;'t help there.

But DO setup your morgage in bi-weekly payments. Its does help and you pay no more then you would at a montly payment.

I have my morgage through rbccentura, they said if I send my payments in biweekly through them it wouldnt make a differance because they would not post it until the total payment was received. Which really makes no sense to me. But anyway they said I would have to go through one of those third party companies.

 

[spidey07]

word to the wise.

Be very careful with "bi-weekly" plans. Paying extra on a mortgage isn't always a good idea financially. You have to work the numbers to see if it is.

 

[daveman]

Originally posted by: rahvin
Don't fall for anyone trying to sell you a biweekly mortgage "plan". You need to do some research to understand what bi-weekly payments really are IF they are done right. A true biweekly plan reduces paid interest each month, the scam plans are nothing more than an extra mortgage payment per year and they hold your money interest-free for you.

Contrary to what Marlin said the bi-weekly plan does cost more money out of pocket. A biweekly plan whether it's a real one or a scam one does result in an extra payment per year which does effect your out of pocket money. Although the money is applied to the mortgage that hit can break some people's finances.

Thanks for the info. Right now I am trying to research what would be best for me. I am building a new house now and plan to be in it in less than 2 months. My morgage payment will be more than double what I'm use to paying so one of the main reasons I'm looking into this is to help me manage my money better. Anyways thanks for all the advise.

 

[Garet Jax]

Extra mortgage payments sound like a great idea on the surface. However, there is one major drawback (plus a few little ones):

1) Equity in a house is very difficult to get to when you need it the most. Your mortgage is against your job, not your house (your house is collateral). If you lose your job and try to refinance (to get the money out), you will be very surprised. The best way to make sure you can extract equity in an emergency is through a HELOC (home equity line of credit).

 

[Jzero]

I thought the point of paying biweekly was not to make an extra payment, but instead just lessening the total interest by not allowing the full balance to accrue interest for the entire month?

 

[DT4K]

Originally posted by: Jzero
I thought the point of paying biweekly was not to make an extra payment, but instead just lessening the total interest by not allowing the full balance to accrue interest for the entire month?

It may be both.
Remember that paying every two weeks != paying twice a month.
My lender sent me some information about changing to bi-weekly payments.
Each payment would be half of my current monthly payment. But over 12 months, I would end up making 26 half payments. So the equivalent of 13 regular monthly payments each year.

 

[rahvin]

Originally posted by: DT4K

Originally posted by: Jzero
I thought the point of paying biweekly was not to make an extra payment, but instead just lessening the total interest by not allowing the full balance to accrue interest for the entire month?

It may be both.
Remember that paying every two weeks != paying twice a month.
My lender sent me some information about changing to bi-weekly payments.
Each payment would be half of my current monthly payment. But over 12 months, I would end up making 26 half payments. So the equivalent of 13 regular monthly payments each year.

Jzero listed what a TRUE bi-weekly mortgage payment was before the marketers got ahold of it and basterdized it. A true bi-weekly payment system actually makes interest and principle payments bi-weekly instead of monthly (the lender actually credits bi-weekly instead of holding the money). This reduces interest paid by a small amount every month (on the second bieweekly payment per month), over the life of the mortgage it adds up substantially. In addition to this you get the extra payment and adding the two together you can cut interest paid by a very substantial %.

Biweekly is a great idea, the problem is it became very popular and lenders saw it as a way to squeeze money out of people. Now they charge for it, hold your money interest free and credit the extra payment at the end of the year. It's a joke now, but if you can find a lender that still does the real one you should do it immediately.

 

[DT4K]

Originally posted by: rahvin

Originally posted by: DT4K

Originally posted by: Jzero
I thought the point of paying biweekly was not to make an extra payment, but instead just lessening the total interest by not allowing the full balance to accrue interest for the entire month?

It may be both.
Remember that paying every two weeks != paying twice a month.
My lender sent me some information about changing to bi-weekly payments.
Each payment would be half of my current monthly payment. But over 12 months, I would end up making 26 half payments. So the equivalent of 13 regular monthly payments each year.

Jzero listed what a TRUE bi-weekly mortgage payment was before the marketers got ahold of it and basterdized it. A true bi-weekly payment system actually makes interest and principle payments bi-weekly instead of monthly (the lender actually credits bi-weekly instead of holding the money). This reduces interest paid by a small amount every month (on the second bieweekly payment per month), over the life of the mortgage it adds up substantially. In addition to this you get the extra payment and adding the two together you can cut interest paid by a very substantial %.

Biweekly is a great idea, the problem is it became very popular and lenders saw it as a way to squeeze money out of people. Now they charge for it, hold your money interest free and credit the extra payment at the end of the year. It's a joke now, but if you can find a lender that still does the real one you should do it immediately.

It does make sense, but I decided against it because I really like getting two "extra" paychecks per year that don't have to go towards any of my bills. Kinda like getting a tax refund, I know it doesn't make sense to let the IRS hold my money for me, but I just can't give up the several thousand dollar refund just for an extra $75 each paycheck.

 

[dullard]

Many banks will do it for you - no need to pay some company ~$300 setup fee plus a "small" fee per payment.

I don't do it though. I get paid once a month, and thus a bi-weekly payment plan is silly. I'd rather pay in full at the beginning of the month (better than half in the middle and half at the end - which in turn is better than full payment at the end).

 

[rh71]

if we only plan to stay 7-10 of the 30-yr mortgage, there's no reason to do it... or even add more principle per payment... right ?

 

[DT4K]

Originally posted by: rh71
if we only plan to stay 7-10 of the 30-yr mortgage, there's no reason to do it... or even add more principle per payment... right ?

Well, you'd still build equity faster and have a lower principal balance when it comes time to sell. Just depends on whether you want to put extra money into paying down your mortgage or use the money for something else.

 

[blakeatwork]

Never heard of going through a third party to accomodate bi-weekly mortgage payments...

The wife and i currently pay bi-weekly, and we're considering going to weekly, to see if we can't pay this beast down a bit sooner..