Hi, I was suggested by friends to switch my monthly mortgage payment
to biweekly. I thought it was a good idea. But after a little
research, it does not make sense to me. First, my lender charge $375
for setup. Second, you pay 26 times, it is the same amount of 13
monthly payment. Third, it saves you very little ( a few dollors every
month ) for the first a couple of years.

My conclusing is that if you payoff or refinance in 5 years, it does
not make sense at all. It would be better to just pay 13 monthly
payments every year. Or, like what I prefer to, pay 108% of the
monthly payment every month. The addtion 8% goes to the pricinpal.

Any ideas?

ff

finecur writes:

Hi, I was suggested by friends to switch my monthly mortgage payment
to biweekly. I thought it was a good idea. But after a little
research, it does not make sense to me. First, my lender charge $375
for setup. Second, you pay 26 times, it is the same amount of 13
monthly payment. Third, it saves you very little ( a few dollors every
month ) for the first a couple of years.

My conclusing is that if you payoff or refinance in 5 years, it does
not make sense at all. It would be better to just pay 13 monthly
payments every year. Or, like what I prefer to, pay 108% of the
monthly payment every month. The addtion 8% goes to the pricinpal.

Any ideas?

You already got it -- if you want to pay down your mortgage faster,
just go ahead and prepay your existing mortgage instead of paying fees
to refinance.

If you get paid on a weekly or biweekly schedule, instead of monthly,
a biweekly mortgage can make budgeting a little easier. But you can
also just plan your "normal" monthly budget on 2 biweekly paychecks,
and in the occasional months where you get an extra paycheck, set the
entire amount aside for investing, paying down mortgage or other debt,
or saving for "special" expeditures like annual vacation, rather than
normal household expenses.

-Sandra

In article .com,
says...
Hi, I was suggested by friends to switch my monthly mortgage payment
to biweekly. I thought it was a good idea. But after a little
research, it does not make sense to me. First, my lender charge $375
for setup. Second, you pay 26 times, it is the same amount of 13
monthly payment. Third, it saves you very little ( a few dollors every
month ) for the first a couple of years.

My conclusing is that if you payoff or refinance in 5 years, it does
not make sense at all. It would be better to just pay 13 monthly
payments every year. Or, like what I prefer to, pay 108% of the
monthly payment every month. The addtion 8% goes to the pricinpal.

Any ideas?

Sure. You're 108% right. Your bank is trying to rip you off.

--
Keith

In article .com,
finecur wrote:

Hi, I was suggested by friends to switch my monthly mortgage payment
to biweekly. I thought it was a good idea. But after a little
research, it does not make sense to me. First, my lender charge $375
for setup. Second, you pay 26 times, it is the same amount of 13
monthly payment. Third, it saves you very little ( a few dollors every
month ) for the first a couple of years.

My conclusing is that if you payoff or refinance in 5 years, it does
not make sense at all. It would be better to just pay 13 monthly
payments every year. Or, like what I prefer to, pay 108% of the
monthly payment every month. The addtion 8% goes to the pricinpal.

Bi-Weekly is perfectly fine, just don't pay a fee for the
service (ever, never, ever). But doing normal monthly payments,
and then adding in one extra payment each year does the same
thing, and it is free to do with no fees.

The real question is if it makes sense to pay off your loan
faster. While it looks like you save years of payments, you
also tie up your money for more years, so the savings is a
wash. If you can invest the money for a better rate of return
than your mortgage rate, then pre-paying the mortgage might
actually be a money loser. You need to run the numbers, then
factor in your gut feel (your comfort with debt and how you
handle money is more important than saving a few bucks).

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708
Newave Communications http://www.johnweeks.com
================================================== ====================

In article .com,
finecur wrote:
Hi, I was suggested by friends to switch my monthly mortgage payment
to biweekly. I thought it was a good idea. But after a little
research, it does not make sense to me. First, my lender charge $375
for setup. Second, you pay 26 times, it is the same amount of 13
monthly payment. Third, it saves you very little ( a few dollors every
month ) for the first a couple of years.

My conclusing is that if you payoff or refinance in 5 years, it does
not make sense at all. It would be better to just pay 13 monthly
payments every year. Or, like what I prefer to, pay 108% of the
monthly payment every month. The addtion 8% goes to the pricinpal.

Any ideas?

Your correct. The banks way is a big moneymaker for the bank and only
incidentally helps you.

Your way is the right way to go.

--
Rich Greenberg N Ft Myers, FL, USA richgr atsign panix.com + 1 239 543 1353
Eastern time. N6LRT I speak for myself & my dogs only. VM'er since CP-67
Canines:Val, Red, Shasta & Casey (RIP), Red & Zero, Siberians Owner:Chinook-L
Retired at the beach Asst Owner:Sibernet-L