K.D. asks from Denver, CO on November 14, 2009
Bi-weekly Mortgage Payments
We just bought a house, and are looking at the possibility of doing the program where you pay every two weeks and end up making a 13th payment each year. In the past, our bank has offered this to us. The bank we are with now does not. We have a paper from Nationwide Biweekly Administration offering to set us up for this service. Has anyone worked with them, or do you have a company you do work with that you like? I'm leery of letting someone who sent me some mail have access to my bank account. They seem okay from what I find, but aren't listed with the BBB or anything. Thank you for your help, ladies! You're always great!
C.M. answers from Denver on November 15, 2009
I have no first hand experience with these programs, but advice I've received about paying extra to set up the twice monthly payment is : don't do it. If you want the benefit without the cost you can make an extra payment each year (one payment toward principle) and the result is the same. It does take more discipline to do this, but then you aren't paying more to someone else, so financially you come out ahead.
J.P. answers from Salt Lake City on November 15, 2009
I have a bi weekly set up with Nationwide. They charge a one time fee and you never have to pay it again even if you sell this house anad move to a different house they will not charge you again. Also they will set you up on more than one mortgage at a time and not charge extra. I have been happy with them considering they were going to save me thousands of dollars over the coarse of the loan.
J.P. answers from Boise on November 16, 2009
I think you can do this yourself, even if you are technically only paying once a month. I wouldn't use a random junk mail ad. Also, never give them your bank account info. If you decide that this is the way you want to do it, set up bill pay with your bank...that way, you are in charge.
A.M. answers from Pocatello on November 15, 2009
When we first bought our house I received letters offering a service like this. I was interested at first until I read all of the fine print. The offers I received had a fee. The way they save you money is you will make 26 total payments a year so you will basically be making a full extra payment each year. I decided not to sign up for this service because I figured if I wanted to make an extra payment each year I would do so on my own without paying anyone any fees. The fees you would be saving by not using this service could be applied to your payments. If I were you I would not use this service.
A.H. answers from Salt Lake City on November 16, 2009
I would not use a service either. However, I do recommend paying your mortgage down more quickly by either paying bi-weekly or paying a bit extra each month if you can. We do the latter. I pay my mortgage online using auto-pay each month, and I just add an extra 100 or so towards the principal. Sometimes more, sometimes less/none (my income fluctuates). I can change the amount easily online when I need to. Admittedly, I get paid monthly, so it makes more sense for us to do it this way instead of bi-monthly, but you could always set up the extra savings account like someone else mentioned, put your half the mortgage there (plus an extra $20 - $50) and pay your mortgage from that account when it comes due.
S.B. answers from Colorado Springs on November 15, 2009
Don't have a service do this for you - you'll end up paying fees for something you could do yourself! Either just pay a little more than the minimum each month and it will do the same thing, and save you the fees. Good luck!
J.Y. answers from Great Falls on November 15, 2009
I would only do this through your mortgage company, any others don't sound legit.
BTW.we do this and really love it, its not so much money at one time and we don't even notice the extra payment...but only do this through your mortgage company...
G.H. answers from Chicago on November 14, 2009
there is a fee to set up bi-weekly mortgage payments & its not cheap. All you have to do is make one extra principal payment per year all on your own. Then you can have the piece of mind that you dont have to trust a company, especially with companies going under in this economy.
M.E. answers from Denver on November 15, 2009
I don't know anything about Nationwide Biweekly Admin, but my husband and I do this through our mortgage company and have saved tons of money in interest in just the 6 years we've owned our home. We didn't pay a fee to sign up. The bank divided our regular monthly payment so instead of paying once at the end of the month we pay half twice a month, so we're not paying anymore out of pocket than we would have and will save loads of money in interest over the course of the loan. We also set up auto pay on our mortgage so we never have to worry about late fees.
L.S. answers from Grand Junction on November 15, 2009
My advice would be simply to make additional payment(s) to your principle payment each month. You can usually set that up online with your bank/mortgage lender and sometimes that's not even necessary. Simply begin making the additional payments to your loan when you write out your check. You can add as much or as little as you'd like and that in turn will decrease the amount you owe long term. That way you are not stuck paying a certain amount every two weeks, trusting someone else with your personal information or writing an extra check. This will also help if you have a shortfall at some point you are not obligated to make that additional payment. There are numerous places online to find a mortgage calculator (CNN, Money Magazine for example)that will help you figure out how much additional amounts added to your principle each month will knock down your payments at the end of the loan. Notice I said put the extra money down on the principle not interest or escrow. You want to lower that principle amount as quickly as possible so you will lower the amount you borrowed. Blessings, L.