How to determine if bi-monthly early mortgage payoff works for you
Is it beneficial to send half of your mortgage monthly payment at the beginning of the month and the other half at the end?
Paying 1/2 of your mortgage on the 1st of the month and then 1/2 on the 15th may fit your budget plan but there are some things to look out for.
Other People Are Reading
Instructions
-
-
1
Make sure your mortgage note does require any unusual prepayment penalties. If no prepayment penalties exist, you can make additional payments to your principle at any time
-
2
It is not beneficial to send the lenader the paymenet in two halves, since the lender will not accept your payment since it is not the full amount ,also the majority of lenders are not set up to accept payments in this manner
-
-
3
There are some companies that will charge you to break your payment in two parts but be wary. Companies that charge to do this often keep the extra amount that would be applied to your principle and earn interest on it, and then at the end of the year they send the payment to the lender to apply it to your loan. This is after they have collected interest on it or invested it. Basically, they are using your money and then at the year's end they are giving it to the lender. Worse, they charge you for this service.
-
4
Be wary as there are no guarantees that the company that is charging you to have the ability to pay your mortgage in bi monthly installments may be a fly by night company. Unfortunately there are many of them. If they go out of business, they may not be there at the end of the year to make that payment to your lender
-
1
Tips & Warnings
you can use a early payoff calcultor to find out how uch you need to pay extra each month to have you loan paid of early. I recommend Karl's mortgage calcultor which can be found at: http://www.jeacle.ie/mortgage/old/
