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For most people, a mortgage is the largest investment and expense they have. My mortgage company sent me an offer to pay off my mortgage 5.5 years earlier if I pay every 2 weeks instead of monthly. It would also save me over $60K in interest! There is an enrollment fee and a small fee each month, but considering the long term savings I may do it. You can call your lender and see if they offer a program like this.
JoeTaxpayer
January 27, 2010 at 6:08 pmScott – don’t. Please. Don’t.
Every two weeks, put the half payment aside. Make the regular payment at month’s end. You’ll find that in June and December, you have an extra half payment that you can make and still be ready for the next. So add that money to the mortgage payment as a “principal only” payment.
Oh, and add the enrollment fee to your payment the first month, also add the monthly fee as “principal only” every month.
There is no magic in the bi-weekly.
When you have your mortgage paid even sooner using this advice, take the wife out to dinner with that extra savings, tell her it’s on me.
Scott
January 28, 2010 at 9:45 amThanks for the tip. I don’t know too much about these types of things. So by paying a principal only payment I’m getting the same results (paid off early and much less interest)without the fees, and I can stay on my normal monthly payment plan. Interesting.
Thanks
JoeTaxpayer
January 28, 2010 at 9:48 amYes. The added benefit of the interest saved over the two weeks (if you went bi-weekly) is pennies, not even enough to cover the fee.
Bi-weekly = 13 (full) payments per year. No magic.
If you have any questions on that, just ask.
Joe