Suggestions on percent to put down on $300,000 home mortgage? (refinance, house)

[manderly6]

Originally Posted by JCK7778

My bank charges $1.25 per payment, so for $2.50 a month the benefits still far outweigh the fees.

The point is you can do it for free. Juts write a check.

[JCK7778]

Unless you tell your mortgage company each time you write an additional payment to apply it to the principal they will just apply it like a regular payment. By doing it this way, the additional 2 payments as well as the extra that I pay each payment is automatically applied to the principal.

Also, I do EVERYTHING online. I have not written an actual check in 2 years...and it is well worht the $2.50 a month for the convenience of them auto drafting it from my checking account.

It is personal preference and I prefer to do it this way.

Originally Posted by manderly6

The point is you can do it for free. Juts write a check.

[HalfFull]

Originally Posted by JCK7778

Unless you tell your mortgage company each time you write an additional payment to apply it to the principal they will just apply it like a regular payment. By doing it this way, the additional 2 payments as well as the extra that I pay each payment is automatically applied to the principal.

Also, I do EVERYTHING online. I have not written an actual check in 2 years...and it is well worht the $2.50 a month for the convenience of them auto drafting it from my checking account.

It is personal preference and I prefer to do it this way.

You're right, it isn't much money ($32.50 per year). But - especially if you have the payments automatically taken out - it really is a silly charge from the bank.

[PolishMaidsDotUS]

You may need to consider other facts not only percentage and principal. If bank let you pay every 2 weeks instead of once a month it will considerably lowers your overall payoff amount and no penalty for adding towards principle is a must IMO. I would ask for how long you have the rates locked up for example,what kind of insurance your bank requires since it effect your yearly spending indirectly. Also I know that income verification may lower your rate in relation to no income veryfication loan you may qualify for putting 30% down.

[bradykp]

Originally Posted by JCK7778

My bank charges $1.25 per payment, so for $2.50 a month the benefits still far outweigh the fees.

my bank wants to charge me $200 to "enroll" plus the $1.50 per payment. the benefits still outweigh the fees, but i think this should be a crime.

[manderly6]

Originally Posted by bradykp

my bank wants to charge me $200 to "enroll" plus the $1.50 per payment. the benefits still outweigh the fees, but i think this should be a crime.

You aren't actually going to pay that are you?

[JCK7778]

In the scheme of the total savings (in my case years off my mortgage and almost $60k in interest saved) $200 + a total of $736 in monthly fees (total of $936 for the life of the loan) it is completely worth it.

Most of the banks do not make you pay the entrance fee upfront, they defer it until 1 of your extra payments hits then deduct it from that, so it is just $200 less towards the principal.

In my case I asked them to waive the fee and they did. My bank originally wanted $150...but honestly I would have totally paid it. The reason for the fees is because it is a thrid party not the actual bank that administers the program. They have overhead costs and want to make money also. It is a small price to pay for the savings you receive in the long run!

Originally Posted by manderly6

You aren't actually going to pay that are you?

[HalfFull]

Originally Posted by JCK7778

In the scheme of the total savings (in my case years off my mortgage and almost $60k in interest saved) $200 + a total of $736 in monthly fees (total of $936 for the life of the loan) it is completely worth it.

Most of the banks do not make you pay the entrance fee upfront, they defer it until 1 of your extra payments hits then deduct it from that, so it is just $200 less towards the principal.

In my case I asked them to waive the fee and they did. My bank originally wanted $150...but honestly I would have totally paid it. The reason for the fees is because it is a thrid party not the actual bank that administers the program. They have overhead costs and want to make money also. It is a small price to pay for the savings you receive in the long run!

If the convenience works for you or the auotmated discipline helps, then it can be a good tool.

But you're essentially making 13 payments (26 half payments) instead of 12 for the year. So you could just make that extra payment when you have liquidity (tax refund time) or you could add 1/12 to the payment each month. You get basically the same effect... for free.

For me, the principle of the bank charging me more to pay them faster just gets under my skin.

[manderly6]

$32 a year I could see doing it for the convenience. I think someone is crazy to pay $200 on top of that when they can just do it for free by writing a check (or having their bank mail a check for them).

[joe moving]

Originally Posted by manderly6

Personally I would do 20% and only that much to not have PMI. Rates are so low I rather have the money available for something else.

second this