Anyone do bi-weekly mortgage?

**DJ1972** · 06-17-2007, 10:21 PM

I have made my to-do list for tomorrow, and #1 is to call the mortgage company to see if we can be set up for bi weekly payments. Wanted to know if any of you do this, and if so, what have been your likes and dislikes? According to a calculator at bankrate.com it will cut 2 years off of my mortgage, plus the 2 smaller payments would make it easier to add more $ towards principal.

**Its_Donna** · 06-18-2007, 04:59 AM

Yes, we do this...we started last year and I can't find our paperwork right now but it knocked off about 8 years on our loan. It was very hard the first month because it's done a month in advance and we had just made a house payment so we had 2 house payments come out the very first month and it cost us $350 to set it up....we sqeaked that month but I have NEVER regretted doing it. It's actually been better than having a big lump sum come out the first of every month. Go For It!

**tervsforme** · 06-18-2007, 10:34 AM

I love it! It makes it sooo much easier to budget by not having 1 big payment a month. Also, you make 2 extra payments a year so that helps also. I would be leary if you have to pay to set it up. I didn't, I just called my bank and it was done in no time. I do agree though that the first month is the hardest money wise, just getting it on schedule.

**Its_Donna** · 06-19-2007, 04:57 AM

Unfortunately Bank of America charges to get the Accelerated Mortgage program started....couldn't get by without paying the $$

**Grayce** · 06-19-2007, 06:38 PM

We have done accelerated bi-weekly payments for years. Basically we pay a little more than 1/2 a regular monthly mortgage payment every 2 weeks. We set it up this way when we renewed our mortgage. It didn't cost us extra to set it up this way.

**mightymoo** · 07-06-2007, 11:40 AM

No, I wouldn't do this. The bank does these programs becuase they make money off them. I wouldn't pay $350 for the priviledge of paying my mortgage payment differently.

Mostly people like the idea that it helps pay off their mortgage early. You don't need to pay for this - biweekly payments add up to 26 1/2 payments a year, or 13 full payments. If you want the same effect of paying your mortgage off early, take your mortgage payment, divide it by 12 and add that to your monthly mortgage payment, make sure it will get applied to capital.

My understanding is the way the bank makes more money on your biweekly payments is they don't credit you the full payment until the end of the month. So they hold your payment and make interest off it, while charging you interest. Plus they often charge money for the priviledge of letting them do this.

I personally feel that you are better off finding another way of making the payments work for you - create your own "escrow account" - a savings account connected to your checking maybe and transfer 1/2 of your mortgage payment in every paycheck, etc.

**ubumartin** · 07-06-2007, 01:36 PM

We paid our mortgage off early by just sending extra money. I wouldn't pay for it though. Especially if you for some reason are short one month or an unexpected thing comes up. Take the 350.00 they want and apply it to your mortgage. Send extra when you get taxes back or have extra some months and apply to the principle. I think that will work just as well. You can also try to set it up yourself by budgeting that money and sending in the extra payment. Go on a mortgage calculator and check out what you can afford. Will the bank will waive the fee to set up? I would only do it if they do.

**kksmom92** · 07-07-2007, 11:43 PM

Originally Posted by mightymoo

No, I wouldn't do this. The bank does these programs becuase they make money off them. I wouldn't pay $350 for the priviledge of paying my mortgage payment differently.

Mostly people like the idea that it helps pay off their mortgage early. You don't need to pay for this - biweekly payments add up to 26 1/2 payments a year, or 13 full payments. If you want the same effect of paying your mortgage off early, take your mortgage payment, divide it by 12 and add that to your monthly mortgage payment, make sure it will get applied to capital.

My understanding is the way the bank makes more money on your biweekly payments is they don't credit you the full payment until the end of the month. So they hold your payment and make interest off it, while charging you interest. Plus they often charge money for the priviledge of letting them do this.

I personally feel that you are better off finding another way of making the payments work for you - create your own "escrow account" - a savings account connected to your checking maybe and transfer 1/2 of your mortgage payment in every paycheck, etc.

I agree and I know Dave Ramsey says it too... never pay a lender $$ to be able to do a bi-weekly!! All you have to do is make one extra house payment throughout the year and it will come out to be about the same. (Few cents different)