I'm doing my budgeting for 2011 and was wondering about doing bi monthly house payments. I'm not looking for a quicker pay off since I am paying extra towards my principle already but it would certainly help with budgeting the monies during the month.
Anyone out there that does this? Any advice or thoughts on doing this?
Thanks.
That's how we do it. It's one payment, split in half every other week. It's supposed to help us pay it off faster, so I'm all for it!
If it's easier, then go ahead and do it. You will get a break on the interest with a bi weekly payment.
The important thing is that you're paying off your principle faster.
Mortgage tips that are always good to do:
•If you can convert a 30 yr to a 15 year--do it!
•Also, by paying O. extra payment per year (total--can be 1/12th the mortgage every month) you can pay off a 30 year mortgage in 20 years and save a TON of interest.
Like the other poster said, make sure what you signed up for allows for early pay off without penalty. We had all our accounts linked online, so I could transfer principal payments even if we just had $10 extra. Every little bit helps and we paid ours off in 14 years. Good for you for budgeting!
Are you looking to make 2 full mortgage payments each month? This probably isn't the best idea because the full payment includes your escrow. Some options...
A - Pay one full payment (your first payment) and an additional principal payments (your second payment).
B - Pay one full payment (your first payment) and just pay interest and prinicpal (your second payment).
Are you looking to divide you mortgage payment into 2 equal payments? You need to check with your mortgage company.
Just another thing to keep in mind. If you itemize on your taxes, interest on your primary mortgage is tax deductable. Other interest such as a car payment is not.
Definitely check with your mortgage company. My last company allowed me to just send in partial payments, one on the 1st and one on the 15th and applied each to the next payment due, I didn't have to auto-debit through them or get it pre-approved. My current company required me to set it up through them, it still comes out on the 1st & 15th, but they had to approve it and I had to set up the auto-debit through them.
Any chance you meant bi-weekly and not bi-monthly? We do an equity accelerator program and pay half of our mortgage every other Friday. We've done this for 5 years and it has made getting the mortgage payment there on time, every time, so easy. We would recommend it to anyone!
I do this and it works well. We pay half our mortgage on the 1st and half on the 15th. With some mortgages it ends up saving you a bit, so I would definitely check into it.
Your Mortgage Company will usually allow you to do this and set it up for you in their Servicing Department. It is good to do it this way and have it autodrafted because they see it coming on their end and therefore do not assess late payments. As you know, paying bi-weekly, some of the Fridays fall where there are 5 in the month, and if so, make sure your Mtg Co. credits your account accordingly. You wouldn't want to get a late payment because your bi-weekly payment fell in the wrong month. Just call their Customer Service # and they will help you. It does save about 8 yrs on a 30 year loan.
You have to contact your mortagage company to have it set up. We have been offered to sign up for it by our mortgage company. We declined since we only get paid once per month and also pay extra pricipal at that time. You need to go thru the mortgage company to make sure that the extra you are paying is still going to "principal only" payments.
