Comments on: Paying Your Mortgage Biweekly

By: I like this article ...but

I like this article ...but — Fri, 31 Dec 2010 14:41:59 +0000

Isn’t there a law ? That stipulates that ALL MORTGAGLE lenders must apply a payment to principal … if and only if the payments are up to date, AND the person specifies during payment in writing with the words “To Principal” on the check or online payment any time of month for as many recurring time ? I have heard this before in South Carolina from a reas estate agent… but I’m not sure or current. Can anyone verify? If yes, then we are truly backed up by-law to make a full payment on the 1st, and then at least a half-payment on a bi-weekly schedule. How’s this sound baby ? If not, then there outta be a law ! Comments ?

By: Eric

Eric — Sat, 04 Sep 2010 16:41:45 +0000

the problem with these programs is that while they remove the money from your checking account every two weeks, the payment is only applied once a month.

the money earns interest for the company. All it does it ensure you make that one extra mortgage payment a year.

Most mortgage companied also will not apply any payments received until the full amount has been paid. So doing a true bi weekly payoff in next to impossible now a days

By: Anonymous

Anonymous — Wed, 26 May 2010 07:55:54 +0000

I had the same problem with Aurora Bank (formerly known as Lehman Brothers and now affiliated with Bank of America). I did a biweekly (50% payment every 2 weeks). They sent me a late charge every month saying they did not get the full payment at the end of the month – to discourage me from paying this way. Their company claims that their system is not set up to handle partial payments. I don’t know the best answer to your question, but I resorted to paying the full payment monthly and sending in extra principal payments to reduce the principal.

By: Paige

Paige — Mon, 08 Feb 2010 22:23:04 +0000

Wells Fargo offers this kind of program for free. I think I will take advantage of it.

By: DAVE

DAVE — Fri, 22 Jan 2010 08:44:51 +0000

Many mortgage banks do not allow 2 weeks cycles.
What then?

By: Christine

Christine — Wed, 29 Apr 2009 00:09:31 +0000

BEWARE of the Accelerator Programs! After refinancing in Nov.08, I thought I was arranging an accelerator mortgage program with BoA. Very interesting scam. First, I paid a month ahead of time in order to allow each additional payment to be applied the day it was deducted from my account. Four months later, I have now learned that despite the fact that BoA have systematically withdrawn weekly payments as well as principal only payments early, they were not applied until the first of the month, hence they had my money while I received no benefit!

By: JOHN

JOHN — Tue, 01 Jan 2008 18:55:50 +0000

many have posted messages stating they haven’t heard from a 3rd party, just their lender. I was looking into bi-weekly payments and called the number on my gmac statement, and the guy asked who my loan was through….turns out the number I called was an agency contracted by gmac and many other lenders….after hearing about the one time $49 sign up fee and the $9 a month processing fee, I then called gmac directly and asked to speak to someone in reference to setting up a bi-weekly payment plan, I was then transferred to the same agency…. this is just info. for any of you who think you may be setting up a bi weekly plan with your lender, you’re probably not, like I said, the first number I called was actually on my gmac statement regarding payment options…

By: Jeffrey Rhodes

Jeffrey Rhodes — Tue, 04 Dec 2007 20:14:24 +0000

Paying off your mortgage faster, saving thousands of $$$$ is great….
There is more to consider:
1) Banks have options-They can apply an extra payment to any part of
the loan. By Law “Under the borrowsers right to Pre-Pay” any time you
submit in an extra payment, in writing you are to inform the bank where
to apply the extra money. If you do not you are a sitting DUCK!!!!!
Question to ask yourself did they apply my money correctly; and how
much interest did I really save with that transaction??????
2) Who will do an audit for you? Remember you do not get any notice
of how much interest you save, or if the bank apply your money
the right way….
3) Educate yourself fully before you go any direction, trust me what you do
not know will cost you in INTEREST!!!!!!!!!!

By: Steven James

Steven James — Fri, 08 Dec 2006 08:22:21 +0000

Well, I have not recieved any offers by a third party company. But my current mortgage company sends me offers about this. They charge $25 as a set up fee which i think is completely insane. Can you help me out ? Well, bills.com warned me about some of the 'Deadly Mortgage Mistakes' and therefore, i am a bit extra careful while shopping for a mortgage now.

By: fivecentnickel.com

fivecentnickel.com — Thu, 07 Dec 2006 01:09:23 +0000

Weekly Roundup – 12/01/06

Here’s a quick look at some of the articles that caught my eye over the past week…
JLP has a list of tax-related records that you should plan on holding onto.
MBH talks a bit about taking the risk out of your year-end FSA activities.
Jim provides s…

By: Berry Enloe

Berry Enloe — Wed, 06 Dec 2006 10:37:19 +0000

Please don’t pay for this service! If you are going to do it do it yourself. Do make sure they pay principle with it and not either future interest payments or escrow.

Here are a couple of considerations:
1. Before you pay extra have six months worth of mortgage payments saved up. If you run out of income it does not matter how many extra payments you have made in the past they will still want your next payment as soon as it’s due… they don’t carry them forward like they do with some car loans.

2. The earlier you start paying extra the more it helps you… thats because you are paying off more of your principle and so you have less outstanding that you owe interest on. Later on in your loan you owe less so would save less.

3. IF YOU ITEMIZE- you need to consider the tax savings and savings return in your decision… if your mortgage is at 6.5% and you can get 5% in a CD then you may not want to pay towards the mortgage early… that cash can be used for opportunities or emergencies that arise later without costing you any money.

By: Damon Clinkscales

Damon Clinkscales — Mon, 04 Dec 2006 00:27:51 +0000

Unfortunately, just sending in an extra payment each month may not work. Sometimes mortgage companies will send the check back to you (or misapply it), claiming they don’t know what to do with it. This sucks, but apparently just the way banks behave.

I agree it is a ripoff to have to pay $350 for these services that automate extra payments, however once you’ve paid that fee, it is a very convenient way to shave 7 years off a 30-year. Fortunately, you can also simulate the same effect by making one extra mortgage payment each year. Just make sure you contact your mortgage company to ensure that they apply it properly.

By: mbhunter

mbhunter — Sun, 03 Dec 2006 05:14:08 +0000

They asked you to refinance again because they figured you had so much fun doing it the first time!

By: Landlord Shmandlord

Landlord Shmandlord — Sat, 02 Dec 2006 05:03:57 +0000

As you can see in the trackback below (which updated incredibly fast), I read your article and started to write a comment, but it ended up turning into a blog post.

Please check it out:

http://www.landlordshmandlord.com/2006/12/01/how-beneficial-is-it-to-make-extra-mortgage-payments-each-year/

BTW, I really like the site = )

By: Steve

Steve — Fri, 01 Dec 2006 10:22:44 +0000

It is amazing how many years that can be wiped off the payment of a mortgage by paying bi0weekly.