Paying mortgage bi-monthly payment plan - Mothering Forums

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Old 02-18-2007, 05:56 PM - Thread Starter
 
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We did this in the past; one time it was through our mortgage co, then DH paid a fee to have an outside co do it when our mort co changed. Is there a way to pay the twice-per-month-and-save-on-interest way without having to go through a separate company or even your own mortgage co? It chaps me to have to spend many hundreds of dollars just to set up payments this way; seems there has got to be a way to d.i.y.?

And if no way to diy, does anyone have any good leads on a company who will set up the payments this way? TIA!
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Old 02-18-2007, 06:00 PM
 
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Yes, those accelarated payments plans usually end up being one extra payment a year. Take the cost of one payment, divide it by 12, add that to your usual mortgage payment, make sure it will be applied to principle, voila, its done. You don't pay twice a month, but you get the same save on interest result.

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Old 02-18-2007, 06:01 PM
 
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I get paid every two weeks. Every two weeks I put one-half of my mortgage payment in my money market account (this can be done automatically if you have direct deposit). When it is time to pay the mortgage I move the money from my money market account to my checking (I do this online and it takes 30 seconds). I make interest on my money every month; I don't pay any surcharges or fees to my mortgage company or a third party; and I still enjoy the benefit of "paying" my mortgage every two weeks.
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Old 02-18-2007, 07:59 PM
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Review your mortgage documentation to make sure there is no fee for pre-payment, then just send in extra principal payments whenever you want to. If you send it with your normal payment, make sure you document on the payment coupon the amout that is intended as extra principal. You should not need a third party at all, and you certainly should not have to pay anything to do this.
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Old 02-18-2007, 08:00 PM
 
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Originally Posted by mightymoo View Post
Yes, those accelarated payments plans usually end up being one extra payment a year. Take the cost of one payment, divide it by 12, add that to your usual mortgage payment, make sure it will be applied to principle, voila, its done. You don't pay twice a month, but you get the same save on interest result.


This is what I do.
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Old 02-18-2007, 11:50 PM
 
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Originally Posted by mightymoo View Post
Yes, those accelarated payments plans usually end up being one extra payment a year. Take the cost of one payment, divide it by 12, add that to your usual mortgage payment, make sure it will be applied to principle, voila, its done. You don't pay twice a month, but you get the same save on interest result.
I just round up with a similar effect (want to pay more, but income is low right now).

I know the bank/those companies make big bucks with the money they charge for the bi-weekly plan, because we get solicited for those plans all the time...

Mom to DD1 (11/1999),  DD2 (07/2003), and DS (11/2012), all born at home and cloth diapered. 

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Old 02-19-2007, 12:00 AM
 
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I just round up with a similar effect (want to pay more, but income is low right now).

I know the bank/those companies make big bucks with the money they charge for the bi-weekly plan, because we get solicited for those plans all the time...
No kidding! What's the likelihood the bank really wants to help you not give them more money?

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Old 02-19-2007, 12:30 AM
 
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Originally Posted by mightymoo View Post
Yes, those accelarated payments plans usually end up being one extra payment a year. Take the cost of one payment, divide it by 12, add that to your usual mortgage payment, make sure it will be applied to principle, voila, its done. You don't pay twice a month, but you get the same save on interest result.
yep this is what we're doing. It's easy and it makes a big difference over the life of the loan. And you don't have to pay any fees this way.
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Old 02-20-2007, 01:28 PM
 
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Originally Posted by InstinctiveMama View Post
I get paid every two weeks. Every two weeks I put one-half of my mortgage payment in my money market account (this can be done automatically if you have direct deposit). When it is time to pay the mortgage I move the money from my money market account to my checking (I do this online and it takes 30 seconds). I make interest on my money every month; I don't pay any surcharges or fees to my mortgage company or a third party; and I still enjoy the benefit of "paying" my mortgage every two weeks.
This is what we used to do also. But according to our bank you are limited to 3 automatic or online transactions form a savings or money market account and still earn interest. Or you are required to have a non interest bearing account, casue you could be funding terorist activities by transferring money several times a month.. Crazy i know, but we had to switch to a non interet one, so we could budget and not overspend..
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Old 02-20-2007, 01:37 PM
 
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This is what we used to do also. But according to our bank you are limited to 3 automatic or online transactions form a savings or money market account and still earn interest. Or you are required to have a non interest bearing account, casue you could be funding terorist activities by transferring money several times a month.. Crazy i know, but we had to switch to a non interet one, so we could budget and not overspend..
Huh, my credit union limits 6 transactions (citing the federal law) from a savings to checking, but no limit on checking to savings.

I was pondering it and my guess is that the purpose is the banking industry doesn't want you able to transfer money too often from savings to checking becasue then you could basically keep all your money in checking and transfer only what you write a check for therefore basically getting savings left interest on a checking account.

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Old 02-21-2007, 05:11 PM
 
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I've been checking into this. My mortgage is through Wells Fargo Bank and they have a program set up, it doesn't cost anything and you can do it all over the phone. They will take half of your mortgage payment out every other friday from any checking or savings account (it doesn't have to be a Wells Fargo account). The only catch seems to be that to get start you must make your full monthly payment by the due date and then they still take out 2 half payments that month, which then count as next months payment. So you pretty much make two mortgage payments the first month it's set up. We would probable have to make one payment using some savings to get it started and I'm not sure if I want to do that.
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Old 02-24-2007, 09:40 PM - Thread Starter
 
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thank you all so much, I looked more into it and, indeed, the consensus is that a third party is unneeded and in fact a detriment to the consumer for many reasons! which is what i suspected all along, anyway; I was appalled that my DH paid to set up the payments in the past. anyway, we'll be paying 1/12 of a payment extra every month toward the principal. I was paying extra, but not a full 1/12. I'll also be striving to exceed that every month by trying to save in other places such as groceries and power bill, putting all extra toward the mortgage. My DH is totally on-board with me on paying the mortgage off, thank goodness (we haven't been too wise regarding finances, starting with hardly ever communicating about them).
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