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Are Bi-Weekly Mortgage Payments a Good Idea?
Posted by Nighthawk504 on 10/8/21 at 7:07 pm40
Trying to decided whether it's a good idea to do bi-weekly payments or just do monthly payments. I've also heard that paying more than the monthly payment goes straight to principal. Any advice helps.
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by FLBooGoTigs1 on 10/8/21 at 7:18 pm to Nighthawk504
If you can afford it then definitely do it.
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by Dandaman on 10/8/21 at 7:24 pm to Nighthawk504
It’s just adding another payment per year. It’s not some secret trick. Yes, paying down debt is generally a good idea.
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by slackster on 10/8/21 at 7:43 pm to Nighthawk504
quote:
Trying to decided whether it's a good idea to do bi-weekly payments or just do monthly payments. I've also heard that paying more than the monthly payment goes straight to principal. Any advice helps.
I may have it wrong, but I believe some (most?) mortgages will not apply partial payments until a full payment is received. In that case, paying an extra payment to just start the year would be more effective.
That being said, paying anything more than the minimum payment on a house in this rate environment seems foolish.
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by JohnnyKilroy on 10/8/21 at 8:03 pm to FLBooGoTigs1
quote:
If you can afford it then definitely do it.
Why pay down cheap debt in an inflationary environment??
Correct it usually sits in suspense until the amount of the regular payment is received, then it would be applied. I would only pay more than minimum payment right now if you have no short term debt, even then i would rather throw it in a mutual fund than make extra payments-unless your interest rate is really high (not likely).
This post was edited on 10/8 at 8:36 pm
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by Drizzt on 10/8/21 at 8:39 pm to Nighthawk504
Just call your mortgage company and ask to make an extra $100-200 payment that goes to principal. If you just make a larger payment a lot of companies just credit that to your future payment and it doesn’t go towards principal. I pay extra on all three of my house payments.
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by buckeye_vol on 10/8/21 at 8:53 pm to Nighthawk504
quote:This may vary by lender (mine is US Bank), but I can just go into the online portal, and it gives me the option to pay extra towards the principal.
Trying to decided whether it's a good idea to do bi-weekly payments or just do monthly payments. I've also heard that paying more than the monthly payment goes straight to principal. Any advice helps.
When I last had a car payment (with Wells Fargo), I could do the same, although there was a payment limit at one time, so I had to do it a couple of times to pay off my loan.
So I’m guessing most lenders have that option, unless they have a really poor and outdated online portal, but in that case you can probably call them.
Personally, I think it’s just easier to add the amount to the monthly payment, then trying to mess with biweekly payments. And since mortgages are on a monthly interest schedule (whereas a lot of other loans and credit are daily), X amount extra put towards principal in a given month isn’t going to get paid off quicker regardless of how many payments you make in that month.
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by buckeye_vol on 10/8/21 at 8:58 pm to Drizzt
quote:I only have one house payment (I’m assuming at least one of your’s is a rental), and I have no desire to pay more, and if I could I would take out a 50 year mortgage, assuming the higher interest rate reflects the longer timeline.
I pay extra on all three of my house payments.
Of course, if interest rates were higher, like in the 80’s I would not have the same view. But besides being able to get better returns elsewhere, I really have an aversion to liquidity risk.
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by FLBooGoTigs1 on 10/8/21 at 10:10 pm to JohnnyKilroy
quote:
Why pay down cheap debt in an inflationary environment??
Knock down that principle on the loan faster so if you sell it that's more money in your pocket Duh
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re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by slackster on 10/8/21 at 10:22 pm to FLBooGoTigs1
quote:
Knock down that principle on the loan faster so if you sell it that's more money in your pocket Duh
Not sure if serious.
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by JohnnyKilroy on 10/8/21 at 10:33 pm to FLBooGoTigs1
quote:
Knock down that principle on the loan faster so if you sell it that's more money in your pocket Duh
Or I could have more money in my pocket today by just not doing that....
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by LSUFanHouston on 10/9/21 at 7:27 am to buckeye_vol
quote:
I only have one house payment (I’m assuming at least one of your’s is a rental), and I have no desire to pay more, and if I could I would take out a 50 year mortgage, assuming the higher interest rate reflects the longer timeline.
Of course, if interest rates were higher, like in the 80’s I would not have the same view. But besides being able to get better returns elsewhere, I really have an aversion to liquidity risk.
You are not wrong, but the vast majority of Americans have no ability to understand, much less perform, borrowing money to invest and making money on the spread.
Topics like this are where what is best for the intelligent people on the MT may not be what is best for the average American.
It's hard to argue for most people that paying down debt isn't a good idea.
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by 21JumpStreet on 10/9/21 at 9:02 am to Nighthawk504
If you can split your monthly payment in 2, sure.
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by Brettesaurus Rex on 10/9/21 at 9:34 am to Nighthawk504
I generally don’t make it a priority to pay off low interest loans in a hurry unless it gets paid down to where I want to just knock it out.
To me there’s not much sense in it unless it’s not manageable in the existing budget.
To me there’s not much sense in it unless it’s not manageable in the existing budget.
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by tigersfan1989 on 10/9/21 at 9:58 am to Nighthawk504
(no message)
This post was edited on 1/1 at 12:29 pm
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by BurlesonCountyAg on 10/9/21 at 10:23 am to Nighthawk504
Verify that you aren’t being charged a fee to set up bi weekly payments. There are some companies who offer this service for a fee. It’s something you can easily do on your own at no cost.
re: Are Bi-Weekly Mortgage Payments a Good Idea?Posted by Drizzt on 10/9/21 at 11:26 am to buckeye_vol
Mathematically you are correct in that the money from an extra payment can make you more than you are saving with current low interest rates. In reality, this doesn’t happen. Putting an extra $100 towards your house payment can shave years of payments off your mortgage. You’ll never miss that $100 but you will definitely spend it if you don’t put it towards the payment. I doubt anyone here is actually going to save more than they are currently if they didn’t make the small extra payment. Behavior is more powerful than mathematics in these situations.
This post was edited on 10/9 at 11:27 am
quote:
saving with current low interest rates
I Bonds are currently earning 3.54% and the rate is expected to jump to 6+% in November. I started moving my emergency fund to I bonds a couple years ago as they have no risk and liquid (after 1 year). My only problem with I bonds is that they limit u to 10k/year.
I refinanced my mortgage a few months ago (30 year @ 2.25%) and plan to hold it as long as I own the home. The only scenario I pay extra is if I get a windfall and can pay it off in one lump sum.
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