I am going to sign my mortgage paperworks today and still deciding whether going with monthly payment or bi-weekly payment. I am going to add $50 every month or $25 bi-weekly to the mortgage. Thank's for the advice.
2007-09-20 04:23:13 · 5 answers · asked by redmouse 3 in Business & Finance ➔ Personal Finance
Personally, I would go with monthly payments but try to find out if you send in payments more frequently how it will be applied. This will give you the option and flexibility to do both. I know I pay my mortgage monthly but try to pay more each month which will go directly to the principal. In bad times, I don't have to make the extra payment, but I have the flexibility to do so when I can.
2007-09-20 04:30:39 · answer #1 · answered by DEVILINME 2 · 0⤊ 0⤋
I disagree with some of the above advice.
Going with biweekly payments on a 30 yr, fixed loan will pay off the loan 7-8 yrs early. Adding principal amount to it will save more in payments, interest, and time. If you choose biweekly pmts, make extra 25 bi weekly. Some of this depends on when the payments are APPLIED to the loan. Some lenders apply the payment when the FULL payment is received, not when half payment is rec'd. This makes a big difference over the term of the loan because it affects a lot of interest being saved or not saved.
\
Some lenders do charge set up fee, monthly fee, courtesy fee, etc. to put biweekly program in place.
The company I am with set up for nothing, charge no monthly fee or anything of that sort. We encourage biweekly pmts. The biweekly payments are applied when payments are received saving clients even more money.
Your lender is in the business of making money. Last year the banking industry made billions of dolllars in fees. They create new ones all the time.
If your lender won't give you the terms you want. Let them know that you know of another lender who will, then contact me.
You have the right to inspect documents before you sign them. Reserve that right, read every word.
Good luck
2007-09-20 14:34:07 · answer #2 · answered by PFS rep 3 · 0⤊ 0⤋
If the bi-weekly plan requires you to pay a fee for the mortgage company to set it up, don't do it!
With the monthly payment you can add extra for principal. You can take that 13th payment that bi-weekly payments would create, divide it by 12 and add that amount to your monthly payment as extra principal.
2007-09-20 11:40:55 · answer #3 · answered by bdancer222 7 · 4⤊ 0⤋
If you do it bi-weekly you will end up making 13 months of payments and paying your loan off much quicker.
2007-09-20 11:28:55 · answer #4 · answered by PJ 5 · 1⤊ 0⤋
I think that the decision should be based on your budgeting. How are you paid at your job? Can you use one check for the mortgage and one for the rest of the bills, or do you need to split it so that you don't spend the money? I'm not sure anyone but you can answer that question.
2007-09-20 11:29:31 · answer #5 · answered by BMW BFD 5 · 0⤊ 0⤋