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Payment twice a month?

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Regular Contributor

Payment twice a month?

Is the program to pay half your payment every two weeks a good idea? Has anyone done this? I just got a letter in the mail asking me if I want to sign up. I guess it means you make 13 payments per year instead of 12. Also, my first payment is due December 1. If I sign up for this program, will I pay a full payment or half?

Starting scores 2/27/12 TU 605 EX 576 EQ 560
Current scores lender pull 9/6/12 TU 663 EX 629 EQ 645
Closed on our first home 10/26/2012!
Message 1 of 5
4 REPLIES
Valued Contributor

Re: Payment twice a month?

Anything to speed up the mortgage process the better.

 

This probably works better for people that are paid on the 1st and 15th vs by weekly.

Message 2 of 5
Valued Contributor

Re: Payment twice a month?

It will save you good money in interest but keep in mind you will make an extra full payment a year. When you pay monthly you pay 12 full = 24 half payments, and with this program you pay 26 half payments = 13 full payments. But you are required to make a payment ever 2 weeks, I make and extra "to principle" payment each month that can save me just as much in interest without the restraints of having to pay every two weeks.

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Message 3 of 5
Valued Contributor

Re: Payment twice a month?

Ask the bank if there is a fee to set up bi-weekly payments.  (Mine charged, but allows me to make as many payments as I want, no charge.  So on one payday, I do a principle ONLY payment.  The next payday, I do my regular payment plus an additional payment principle only.  On the rare occassions when I have three paychecks in a month <happens twice a year>, I make an extra principle payment.)

 

Ask the bank how they will apply the payments.   (Mine allows me to decide when I make the payment.  I choose principle only, but I do have the choice of paying ahead to the next month.)

Message 4 of 5
Valued Contributor

Re: Payment twice a month?


IOBA wrote:

Ask the bank if there is a fee to set up bi-weekly payments.  (Mine charged, but allows me to make as many payments as I want, no charge.  So on one payday, I do a principle ONLY payment.  The next payday, I do my regular payment plus an additional payment principle only.  On the rare occassions when I have three paychecks in a month <happens twice a year>, I make an extra principle payment.)

 

Ask the bank how they will apply the payments.   (Mine allows me to decide when I make the payment.  I choose principle only, but I do have the choice of paying ahead to the next month.)


+1 on this advice 

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Message 5 of 5