Monthly or Bi-Weekly?

**AmyBoz** · 01-16-2006, 05:43 PM

How do you pay your mortgage?

We just got our thousandth thing in the mail from our mortgage company, trying to encourage us to pay our mortgage bi-weekly. It takes 5 years off of the mortgage. This is the first time we've actually read through the materials and dh wants to do it. I'm not so sure. I'm a little nervous that we won't have the money every 14 days, and this system automatically deducts from your savings or checking account. There are no provisions for sending in a check.

So, I'm curious, how do you pay your mortgage, and if you do it bi-weekly, how's that working for you?

guest7 · 01-16-2006, 06:00 PM

I have heard this program shaves more than 5 years off.
I'm sure you'll have the money in there. You'll just do it. It'll be part of your bills.

Scary thing is this; what IF you can't pay it that many times? can you go back to monthly? Does it require a closing fee of sorts?

This is what I would do. Try it out without committing to it. It would requre a bit of money up front.- so you can make the payment comfortably.

You can make your normal payment on it's due date. then 2 weeks later, make 1/2 payment and then two weeks after that make your other 1/2 payment. As long as you get the 2nd payment in before the due date- you've made your normal monthly payment.

Continue in that fashoin- sending your 1/2 payments every two weeks. The mortgage company will accept it. They just want their money by the due date. so be sure that the payments line up that way. Eventually, actually in 3 months or less- you would have made that extra week payment and you'll be ahead of the mortgage payment- and never will be late.

I on the other hand, just make an extra mortgage payment every year. So I pay monthly.
MIL used to pay the principal, interest and principal each month. double principal payments. Quick payoff for her.
Good luck in making a tough decision.

**dwallyfam** · 01-16-2006, 06:37 PM

Watch the programs. My mortgage company wants me to do this and it wants $195 fee for me to do it. The program sets you up to make one extra payment a year. You can do the same thing by taking your payment and divide by 12 and add the extra amount into the bill

Kellie

**juliek** · 01-16-2006, 07:21 PM

I would not do it if the bank wanted to charge a fee, and they nearly always do.

As Kellie said, you can do the same thing by adding extra to your monthly mortgage payment. Write a separate check and mark it *PRINCIPAL ONLY* and they have to accept it unless your current mortgage has prepayment penalties.

**AmyBoz** · 01-16-2006, 08:29 PM

Yeah, we just re-read everything and found that they are charging a one-time fee of $375

We decided to stick with the current plan, and if we are in a position at some point to send in an extra payment, we will.

**Mamaw** · 01-16-2006, 09:06 PM

I pay mine monthly. You can always send in an extra payment whenever possible and pay a bit more on principal to get the time down.

**seadream** · 01-16-2006, 11:35 PM

I pay mine monthly also and always add extra every month

**tervsforme** · 01-17-2006, 08:34 AM

My cousin is a mortgage broker and I asked her about this just a couple of weeks ago. She said not to do it because it just generates more fees for the companies. She said you can send in extra money when you have it and that would help also.

**Deborah_Kate** · 01-17-2006, 09:16 AM

Ours is monthly, for now. We have talked about paying it bi-weekly and DH was wanting to do it at our old house, but then we moved and haven't seriously discussed it since we bought the new house 18 months ago.

DH is worried that we won't have enough to pay the rest of the bills right now if we do it the bi weekly way. And he's right, at least for now. In 3-5 years, when the rest of the debt is gone, I plan to pile on everything to the mortgage and we'll get it paid off early anyway.

Deb

**favesis37** · 01-17-2006, 01:20 PM

we pay monthly

**pkellyc** · 01-17-2006, 02:01 PM

I like monthly. I just add to the principal every month.

**SewCrafty** · 01-17-2006, 02:06 PM

When we refinanced at a lower interest rate years ago we went with bi-weekly payments. It is paying our mortgage much faster and isn't hard really. Jack handles the bills, we get paid at the beginning of the month, so he just takes both payments out of the check register at the same time. That way we know the money is in there to cover the mid month payment.