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Don't see the point as you can do it on your own for free making just one payment a month. Bi-monthly equals 13 payments/yr. instead of 12. You can take your principal and interest payment divided by 12 and add that much additional to your payment every month and accomplish the same thing.
Not really. When you pay bi weekly you save also on the interest, but do it yourself if they allow it.
My mortgage company does not allow it, so I just round the payment, but started just now, even though I am not sure that smart because I owe 474 + heloc of 70 total 544k while the house is worth 300-320.
My loan officer told me that I don't save anything if I pay more, and at the time when I read the contract it seem that way. Now when I emailed them and ask they said that I do save on the principal and the interest. So I lost about 4 years that I could have paid it down and didn't.
I don't make extra payments every month, but I make a lump-sum extra payment once per year. I took out a 15-year mortgage in 2003, so the original repayment date was 2018. With my extra payments that I've made, it will be paid off 4 years early even if I make no extra payments in the future.
My plan is to make another lump sum extra payment at the end of this year, and then it will pretty much amortize itself out in the coming year of 2011. Depending on how much I pay at the end of this year, there might be a little bit left at the end of 2011, and I'll knock it off then, if nothing happens (such as job loss) that knocks me off this plan. The loan will then have been paid off 7 years early.
I would like to be at least 2 whole payments ahead. So if something were to happen to my hubby's job, we'd be 3+ months ahead. Kinda like a savings account. No I can't touch it immediately, but the money for the mortgage payment is basically already there. And by 2 whole payments, I mean everything, principal, interest, & escrow.
Right now, due to the fact we pay our mortgage out of hubby's VA disability that comes on the first, and our payment is due on the first, when I mail out April's payment it is the payment that will be due May 1st. I don't consider that being a payment ahead. I would like to be at the point that when I mail out April's payment, it is the payment due July 1st.
I guess I have a different concept of what should be paid and whatnot. My house to me is not an investment. It is a home. I'd have to pay rent somewhere if I didn't own. And with 3 cats and a pupdog, I'm sure we'd be paying more to rent with pet fees than our total mortgage payment. Investing is ok, if you're into that. But instead of taking cash and investing in stocks and bonds or whatever, I'd rather put it into what I owe on my home. Because down the line, I might need those extra payments. And if I don't, guess what? My house is going to be paid off sooner and I won't have that extra money due at the first of the month.
We are also working hard at paying off credit card bills and a couple loans. So if/when hubby's company decides to promote him again but it comes with a transfer, and they say either transfer or... we will say no thank you. If they inturn decide or..... who cares. We are in Kentucky for life now!
When we refinanced the ranch where we live, we simply added a certain amount to be paid towards principle every month. It ended up being about the same as the payment that we were making before refinancing coming out of our account each month, but we financed for 15 instead of 30 years and we will be paid off much sooner than that because of the extra payments, without really even noticing. Since we're approaching retirement age, that means we won't have that payment by the time we retire (a major goal) and will have saved a lot in interest.
Don't see the point as you can do it on your own for free making just one payment a month. Bi-monthly equals 13 payments/yr. instead of 12. You can take your principal and interest payment divided by 12 and add that much additional to your payment every month and accomplish the same thing.
This is what we do - we pay extra each month so that we are making about 13.5 payments each year. Because of that I answered 'yes'.....we'd love to be right here in our golden years, so accelerating our payoff date works for our mindset.
I would like to be at least 2 whole payments ahead. So if something were to happen to my hubby's job, we'd be 3+ months ahead. Kinda like a savings account. No I can't touch it immediately, but the money for the mortgage payment is basically already there. And by 2 whole payments, I mean everything, principal, interest, & escrow.
Right now, due to the fact we pay our mortgage out of hubby's VA disability that comes on the first, and our payment is due on the first, when I mail out April's payment it is the payment that will be due May 1st. I don't consider that being a payment ahead. I would like to be at the point that when I mail out April's payment, it is the payment due July 1st.
Be careful when doing that that the bank knows that is what you are doing. Many lenders ASSUME that if you don't have a current payment due within 30 days, any payment received is a principal payment and it DOES NOT get applied to the next month's payment.
So you could think you are paying July's and they think you are making a principal payment, and come July 1st, another payment is due.
Be careful when doing that that the bank knows that is what you are doing. Many lenders ASSUME that if you don't have a current payment due within 30 days, any payment received is a principal payment and it DOES NOT get applied to the next month's payment.
So you could think you are paying July's and they think you are making a principal payment, and come July 1st, another payment is due.
Actually, I called Wells Fargo to ask and was told that the due date on the statement was the due date. So if we mail the payment that is due on August 1, May 1st, we will not have another payment due until September 1st. So if we send 15 months in ahead, we could go 15 months w/o making a payment. Not saying we'd ever do that.
On our statement we can actually make as many full payments as we want. There is a line for each type of payment. FULL mortgage payment, Extra principal payment, extra interest payment, late payment. We can't make a partial mortgage payment and add extra principal interst or late. All monies, no matter how marked, are applied to the monthly mortgage payment, then applied as we have marked. I can't see why anybody would not make a full payment and then add other payments, but the world is full of other people.
I'm a bit anal about having a statement for every payment. SO when we got our tax returns and wanted to make an extra payment, I sent the normal payment in, waited the 7 days to get the next statement and sent it in. Got the next statement in 7 days, which we paid the next month as scheduled on our budget.
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