Bi-Weekly Mortgage

[klucich]

I talked with Fidelity today, and it turns out that they are only offering me a standard Bi-Weekly service. This means a third party takes the money from my account every two weeks and holds the money in limbo (making interest off my money) unil the end of the month. At this point they make a monthly payment. All this does is accumulate that one extra payment each year, which I can do my self.

What I wanted was a true Bi-Weekly mortgage, where they payment is applied every two weeks and the interest on the loan is also recalculated every two weeks. Apparently these are really hard, if not impossible to find.

I e-mailed Chase to see if the interest stops accumulating on an early payment, if I were to send them payments every two weeks.

At this point, I think my best bet is to set up an account and have half my payment deposited into savings every two weeks and then have my monthly payment deducted from that account each month. This will give me the extra 13th payment at the end of the year. I will also up the amount to $1081.50, which will give me an extra $153.80 applied to the principal each month. I'm not a spreadsheet whiz, but at best calculations, doesn't this take my 30 year loan from 23 years down to 16-17 years?

 

[moburkes]

Of course that is what Fidelity offers, that is exactly what their business is. Do as you suggested, and, yes, it will pay your mortgage off somewhere in the range of what you wrote. You can call your mortgage company and ask if you pay $x.xx EACH and EVERY month going forward, when your loan will be paid off. They will tell you over the phone for free, but may charge a fee if you want an amortization schedule in writing.

 

[klucich]

Bi-Weekly

Ok, thanks for all the great advise you guys. This is such a great web site and does a great service for those who need answers to simple questions.

I've got a plan and am very happy knowing we are doing the best we can do for now and that we are on the right track.

I just sent Fidelity a nice "thanks, but no thanks" e-mail. Also I will get that new savings account opened up next payday.

Have a great day and thanks again!

Kim

 

[LindaP777]

FYI - to help calulate an amortization calculator, try this; http://ray.met.fsu.edu/~bret/amortize.html
You'd be amazed by adding $100 - $200 a month will take years off your loan!

 

[klucich]

Bi-Weekly

Thank you!