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ttcing
LIF Adolescent
Member since 8/09 851 total posts
Name:
Mel
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Mortgage Payment
What is the difference b/w accelerated mortgage (biweekly payment) and just paying an extra payment a year??
They are the same correct??
Anyone do either of these and what are the pros and cons to both? I want to pay off my house sooner than 30 years. Thanks
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Posted 4/2/11 10:02 AM  |
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Prudential Douglas Elliman Real Estate
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Hofstra26
Love to Bake!
Member since 7/06 27915 total posts
Name:
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Re: Mortgage Payment
It works out to be the same. Sometimes people find it easier to make the biweekly payment rather than coming up with a full extra payment all at once. Not all banks offer the option for biweekly payments (My 1st mortgage is with Chase and they don't) so you may need to go through a 3rd party to do it but be careful of fees and late payments. Make sure and do your research beforehand. 
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| Posted 4/2/11 12:13 PM |
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Erica
LIF Adult
Member since 5/05 11767 total posts
Name:
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Re: Mortgage Payment
the biweekly plan usually has fees attached. You can pay an extra payment a year by taking your monthly payment divide by 12 and add that to your mortgage.
ex:
3000/12=250 - so pay $3250 a month and you will make an extra payment.
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| Posted 4/2/11 3:23 PM |
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MaZz
* Lovin my baby girl!!! *
Member since 2/09 6243 total posts
Name:
Gina
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Re: Mortgage Payment
They are not the same. Making more frequent payments in 1 month will actually reduce the amount of interest you pay over time. I don't think it ends up being a sig savings but still more of a savings... Every penny counts right? I actually just wait until we get our taxes back to make that additional payment(s).
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| Posted 4/2/11 3:36 PM |
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JRG71
*****************
Member since 5/05 5025 total posts
Name:
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Re: Mortgage Payment
Posted by ttcing
What is the difference b/w accelerated mortgage (biweekly payment) and just paying an extra payment a year??
They are the same correct??
Anyone do either of these and what are the pros and cons to both? I want to pay off my house sooner than 30 years. Thanks
The difference is the interest, and the number of years you pay off your mortgage.
Look an ammoritization chart - You will be amazed at the difference.
Our mortgage is with Wells Fargo. We pay bi weekly and more then our monthly payment. NO FEE's - We technically bought our house 4 years ago and are scheduled to have it paid off in 18 years. All said and done it comes out to 3 extra payments a year.
The only con - Some months I would like to take that extra money and do other things.
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| Posted 4/2/11 4:38 PM |
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Blazesyth
*yawn*
Member since 5/05 8129 total posts
Name:
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Re: Mortgage Payment
You don't have to sign up for a program to do this - just send extra and mark off that extra should be applied to principal. That way you are also not obligated to do it every time.
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| Posted 4/2/11 5:33 PM |
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cutie
LIF Adult
Member since 2/06 1893 total posts
Name:
Janine
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Re: Mortgage Payment
We couldn't sign up for bi-weekly payment with our mortgage when we re-financed, so we changed our direct deposit to put have of the mortgage payment into a seperate account bi weekly. We then have the mortgage direct debited out of the account and whatever is left at the end of the year will be sent to be applied toward principal.
The main difference is that we have to make the extra payment on our own, but if we really need the extra money for something else, we can use it for that.
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| Posted 4/2/11 6:40 PM |
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CAMCaps
Live Laugh Love Run
Member since 6/07 4922 total posts
Name:
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Re: Mortgage Payment
Posted by Erica
the biweekly plan usually has fees attached. You can pay an extra payment a year by taking your monthly payment divide by 12 and add that to your mortgage.
ex:
3000/12=250 - so pay $3250 a month and you will make an extra payment.
This is what we do.
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| Posted 4/2/11 8:12 PM |
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HelenZ
So worth the wait :)
Member since 10/07 2862 total posts
Name:
Helen
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Re: Mortgage Payment
we do a bi-weekly payment, no fees (Wells Fargo). The difference is that you actually pay less interest over time with a biweekly payment plan since you are reducing the interest charged with every month since your principal is being reduced faster than it would with the 1 extra payment at the end of the year.
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| Posted 4/2/11 8:31 PM |
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Mrs213
????????
Member since 2/09 18986 total posts
Name:
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Re: Mortgage Payment
With mine they actually give u the option to pay more if u want towards principal or escrow so we do $300 extra a month towards principal instead o a extra payment for year
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| Posted 4/2/11 11:45 PM |
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