How to Make Bimonthly Mortgage Payments without Fees

Have you received a bi-monthly mortgage payment offer? Look closely at the fine print, as this may not be a favorable arrangement. And, there could be added fees that will not go towards reducing the amount you owe on your home. If you sign up, you will be locked into paying a house payment every two weeks whether you have the money or not, even if your financial situation changes. Here are some ways to make bimonthly payments and avoid the fees. .

Instructions

Difficulty: Moderate

Things You’ll Need:

• Mortgage
• Money
• Home
• Extra principal

1. Get a good picture of your financial situation both now and perhaps five years down the road. Ask yourself if you can afford extra payments on your mortgage.
2. Since your financial situation may change at any time, and you will not want to pay extra fees, consider adding on your own extra payments.
   No, you normally cannot just send extra to the mortgage company without a mortgage payment. But, you can send what is known as additional principal (or payment) along with your regular mortgage payment each month.
3. Most times, depending on what you owe, you can usually divide your mortgage payment by 12, and pay that extra amount each month. For example, a $1,000 per month payment would mean an extra $84 principal payment (approximately). If you escrow for taxes, it may take a bit more depending upon the amount.
4. If you mail in your monthly payment each month, you may have noticed there is a blank for extra principal. Fill in the amount here. You can do different amounts each month according to your budget. For example, if you know you are going to pay an extra $84 per month, plan on setting aside $21/week for that purpose, even if you put it in a jar or envelope and deposit it at the end of the month at the bank.
5. If you make payments electronically through your bank's Web site, many times they will assume you want any extra payments applied to the principal. Call or email them to make sure this is being applied correctly, or access the mortgage Web site or your next statement.
6. If you pay online, visit your mortgage company's Web site and fill in the appropriate amount in the extra principal box. Again, this can vary by month. If you get a bonus or things are tight, you can adjust the amount accordingly.
7. All this is done without fees, fines, deadlines or contracts. Most times this will equal a bi-monthly payment. Check the amortization table links for more information (see Resources below).

Tips & Warnings

• Make sure all your other debt is paid off before you do this.
• Be sure your mortgage does not have a prepayment penalty built in.
• Check with a financial or tax advisor to find out what impact this will have on your individual situation. This is not meant to replace the advice of professionals.