Posted on: 21st Aug, 2010 05:56 pm
I am getting a fixed 30 YM. I want to make bi-weekly payments. Lets say payment is due the first of NOV. I want to put 1000 towards the loan on the 2nd and 16th every month.
The wife and I are disagreing over this. She keeps telling me a friend of hers was told she couldnt do this from her mortgage company.
How can I make sure this is ok for me to do? In out loan papers it says no prepayment penalty.
Any help?
The wife and I are disagreing over this. She keeps telling me a friend of hers was told she couldnt do this from her mortgage company.
How can I make sure this is ok for me to do? In out loan papers it says no prepayment penalty.
Any help?
Welcome radek,
You can contact your lender and check out whether or not he would accept the biweekly payments. If your lender accepts such payment, then there shouldn't be any problem in going for it.
You can contact your lender and check out whether or not he would accept the biweekly payments. If your lender accepts such payment, then there shouldn't be any problem in going for it.
It is up to the lender. I've seen some allow it with auto-debits and some for a fee. If they don't allow it or the charge is really high, you can accomplish the same thing by making 1 extra principle payment each year.
Something else I was going to mention - if you are making payments on the 2nd and the 16th - then that is not bi-weekly, it is semi-monthly and you will not get any extra principle reduction. (That is if you are just making half the scheduled payment.)
The reason why the bi-weekly payment plan pays down the mortgage faster is it applies 2 extra half payments per year in the months that have 3 pay periods and not 2.
The reason why the bi-weekly payment plan pays down the mortgage faster is it applies 2 extra half payments per year in the months that have 3 pay periods and not 2.