Comments on: Accelerated Mortgage Payment Plans: Don’t Waste Your Money http://www.americanconsumernews.com/2007/09/accelerated-mortgage-payment-plans-don%e2%80%99t-waste-your-money.html News for Consumers in Changing Times Sun, 12 Feb 2012 04:49:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Anonymous http://www.americanconsumernews.com/2007/09/accelerated-mortgage-payment-plans-don%e2%80%99t-waste-your-money.html/comment-page-1#comment-914 Anonymous Tue, 11 Sep 2007 16:11:00 +0000 http://www.americanconsumernews.com/2007/09/accelerated-mortgage-payment-plans-don%e2%80%99t-waste-your-money.html#comment-914 Matthew does not seem to get the concept of the bi-monthly payment program. First and foremost, if you enter into a bi-monthly payment program with your lender, it is just that, bi-monthly. Mortgages are set up on a 360 day calendar or 12 30 day months. You therefore make a payment on the 1st and one on the 15th, not every 2 weeks as suggested in Matt's article. <br/><br/>You therefore make 24 payments rather than 26 as he indicated. You are playing the interest game and save interest by paying early. If you stick with the program, it can shave about 8 years off of a 30 year mortgage, without paying additional principle. If you add 1/12 to your payment for principle each month, as recommended in Matt's article, you will accomplish the same goal as the bi-monthly program, however, you will have sent in an addition 22 payments over the course of 22 years. <br/><br/>Most lenders will allow you to make bi-monthly payments at no charge as they love to get their money sooner than later. <br/><br/>Regarding, marketing companies that offer the bi-monthly programs, I've been involved in real estate for over 25 years and have never been approached by one. There maybe scams out their that set you up in a 26 payment program and pocket the extra two payments, but as I indicated I've never come across one. Maybe that is where Matt got his misinformation. <br/><br/>Regarding mortgage policies, he is right, it is generally cheaper to buy a term life and or disability policy, however, some of the mortgage policies can be easier to qualify for. <br/><br/>Take Care,<br/>LMB Matthew does not seem to get the concept of the bi-monthly payment program. First and foremost, if you enter into a bi-monthly payment program with your lender, it is just that, bi-monthly. Mortgages are set up on a 360 day calendar or 12 30 day months. You therefore make a payment on the 1st and one on the 15th, not every 2 weeks as suggested in Matt’s article.

You therefore make 24 payments rather than 26 as he indicated. You are playing the interest game and save interest by paying early. If you stick with the program, it can shave about 8 years off of a 30 year mortgage, without paying additional principle. If you add 1/12 to your payment for principle each month, as recommended in Matt’s article, you will accomplish the same goal as the bi-monthly program, however, you will have sent in an addition 22 payments over the course of 22 years.

Most lenders will allow you to make bi-monthly payments at no charge as they love to get their money sooner than later.

Regarding, marketing companies that offer the bi-monthly programs, I’ve been involved in real estate for over 25 years and have never been approached by one. There maybe scams out their that set you up in a 26 payment program and pocket the extra two payments, but as I indicated I’ve never come across one. Maybe that is where Matt got his misinformation.

Regarding mortgage policies, he is right, it is generally cheaper to buy a term life and or disability policy, however, some of the mortgage policies can be easier to qualify for.

Take Care,
LMB

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