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Trying to make twice a month mortgage payments
Posted on 3/11/16 at 9:07 pm
Posted on 3/11/16 at 9:07 pm
I set up my bank to pay half my mortgage 2 weeks before it is due, and the second half when the payment is due. Today I found out that they sent the payment back. On the phone, the mortgage company I had the right to make early payments, but not partial payments. Sounds pretty fishy to me. Anyway, I will read the contract soon to see what I can decipher. Any comments? Suggestions to fix this or others ways to cut down on the amount of interest I end up paying them?
4
Posted on 3/11/16 at 9:26 pm to Stingray
Who is your mortgage though? Yo should have the option to simply make a principle payment whenever you want to online to manually do this.
Posted on 3/11/16 at 9:35 pm to rpg37
Huntington
Posted on 3/11/16 at 10:13 pm to Stingray
That sucks. I have my mortgage with Wells Fargo and I just called them up to setup the biweekly payments. It makes it much better for budgeting.
Posted on 3/12/16 at 9:18 am to Stingray
quote:
Suggestions to fix this or others ways to cut down on the amount of interest I end up paying them?
How is making 24 payments vs 12 payments going to reduced your interest?
I know some companies allow you to make bi weekly payments which gives you an extra two payments a year. Also what is your interest rate? You probably shouldn't worry about paying down your mortgage.
Posted on 3/12/16 at 9:27 am to barry
quote:
How is making 24 payments vs 12 payments going to reduced your interest?
If his payments are applied immediately, and his interest is one that compounds daily, then that first payment reduces the principle of which the interest for the second is compounded. It's probably a negligible amount he's saving.
Posted on 3/12/16 at 9:33 am to GoldenD
quote:By this same theory wouldn't he just be better off paying it in full at the beginning of the statement period rather than the end.
If his payments are applied immediately, and his interest is one that compounds daily, then that first payment reduces the principle of which the interest for the second is compounded. It's probably a negligible amount he's saving.
Posted on 3/12/16 at 9:49 am to Stingray
I think you would have to pay ahead one month before they would allow you to make 1/2 payments. If you're due March 30, they're not going to accept 1/2 on the 15th and 1/2 on the 30th.
In my experience.
I don't believe that process would speed your interest pay-down anyway.
In my experience.
I don't believe that process would speed your interest pay-down anyway.
Posted on 3/12/16 at 9:49 am to jturn17
quote:
By this same theory wouldn't he just be better off paying it in full at the beginning of the statement period rather than the end.
Of course, but he might not have the full funds available at the beginning of the statement.
Posted on 3/12/16 at 10:49 am to barry
quote:
How is making 24 payments vs 12 payments going to reduced your interest?
I'm actually making 26 payments a year.
Posted on 3/12/16 at 12:25 pm to Oenophile Brah
quote:
I think you would have to pay ahead one month before they would allow you to make 1/2 payments. If you're due March 30, they're not going to accept 1/2 on the 15th and 1/2 on the 30th.
In my experience.
I don't believe that process would speed your interest pay-down anyway.
Thanks for the response.
Can you explain why it wouldn't help pay down more of the interest over time? I have read some things saying it would help.
Posted on 3/12/16 at 1:33 pm to Stingray
quote:
Can you explain why it wouldn't help pay down more of the interest over time?
1. Technically you don't 'pay down' interest as interest is always accruing as long as there is a principle balance.
2. Paying down any principle faster than your regularly scheduled 360 payments (assuming a 30 year term) will decrease the amount of interest accrued, thus lowering the amount of interest you would pay over the life of the loan (again vs. if you made your regularly scheduled 360 monthly payments).
3. Interest will always accrue at the same rate as laid out in the note, the only difference is the amount of principle that the interest is accruing on.
Posted on 3/12/16 at 3:12 pm to MikeBRLA
Okay, I understand that "pay down the interest" might be a confusing statement. The way I am using it means that I am paying more/earlier to benefit from having to pay less interest over the lifetime of the loan.
Posted on 3/12/16 at 6:41 pm to Stingray
You have the make the full payment and then a partial payment. Halving the payment makes a partial payment which your mortgagor has indicated is not acceptable.
Posted on 3/13/16 at 7:52 am to VABuckeye
If I make a full payment one month before it is due, then start the 1/2 payments immediately after that, so that after 2 (1/2) payments the mortgage will have recent 2 payments, would I be able to continue with the 1/2 payments indefinitely?
Another way to ask is, will the 2 (1/2) payments prior be able to serve as the full payment so I can continue only making half payments?
Another way to ask is, will the 2 (1/2) payments prior be able to serve as the full payment so I can continue only making half payments?
Posted on 3/14/16 at 8:53 am to Stingray
quote:
Another way to ask is, will the 2 (1/2) payments prior be able to serve as the full payment so I can continue only making half payments?
No, for round numbers if your mortgage is $1,000 per month and you paid $500 on Feb 15 and $500 on Feb 29, you will need to pay $1,000 today for your March payment and then $500 on March 15 for April and $500 on March 30 for April in order to be able to do the bi-weekly payments.
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