Posted on: 25th Feb, 2009 09:37 am
I want to pay bi monthly payments but I'm not sure how with much
I pay with my escrow included in the principal mortgage payment.
I pay with my escrow included in the principal mortgage payment.
it would be advisable to counsel with your mortgage lender about this. i'd suggest, though, that you begin making your bimonthly payments after you're already ahead of the game. in other words, if your next payment is due march 1, don't begin sending half-payments until after you've made that march 1 payment...otherwise, the lender will think you're only sending a partial payment and will reject it.
You said "bi-monthly", not "bi-weekly". there is a difference. With a bi-monthly maybe you pay the 15th and 30th of every month. That is not making any extra payments per year. so, does not pay off too fast.
With a bi-weekly you pay every 14 days. That is an extra payment a year.
If you are using an outside agency to set that up, they usually charge several hundred dollars and be careful, there have been some outside agencies that do not do what they say.
If you plan to mail payments or electronic transfer yourself, be careful, you're asking for trouble hoping the bank/lender accepts and processes them properly.
Just a suggestion, make your regular payment at the end of every month and include one twelfth of your principal and interest payment extra. That is the same as making one extra payment a year as you would with a bi-weekly payment. It pays off the loan in about one to three months longer than a bi-weekly (depends on what your interest rate is--higher interest rates pay off faster)
At an interest rate of 10% a bi-weekly pays off in about 21 yeasr and 6 months.
At a rate of 5.50% a bi-weekly pays off in about 24 years and 6 months.
That's for 30 year fixed loans.
With a bi-weekly you pay every 14 days. That is an extra payment a year.
If you are using an outside agency to set that up, they usually charge several hundred dollars and be careful, there have been some outside agencies that do not do what they say.
If you plan to mail payments or electronic transfer yourself, be careful, you're asking for trouble hoping the bank/lender accepts and processes them properly.
Just a suggestion, make your regular payment at the end of every month and include one twelfth of your principal and interest payment extra. That is the same as making one extra payment a year as you would with a bi-weekly payment. It pays off the loan in about one to three months longer than a bi-weekly (depends on what your interest rate is--higher interest rates pay off faster)
At an interest rate of 10% a bi-weekly pays off in about 21 yeasr and 6 months.
At a rate of 5.50% a bi-weekly pays off in about 24 years and 6 months.
That's for 30 year fixed loans.
good catch, john...thanks. i think i've had too much to do today.
i'm calling you now, too
i'm calling you now, too