@Dally17 wrote:
Proven survey: After just 3 years...99% of mortgagees FAILED to continue to make extra payments on their own (the 13th payment).
Just because you feel that you can do this on your own without paying any kind of fee does not mean that everyone else can.
If everyone was to be honest with themselves and pull out the payment history of their loans and ask, how many times have you sent in an extra payment on your own?
I'm pretty sure you just made that statistic up. If not, show the evidence - 99% of people who use the statistic "99%" are making it up. According to Dave Ramsey, citing FICO, 97% of people do not systematically make extra payments. But what is meant by systematically? The actual number of people who pay something extra is going to be greater, even if they don't do it systematically. Regardless, it's almost certianly not 99%.
My lender allows me to pay biweekly, weekly, monthly, and any amount that I want. I don't need to pay a fee for this privilege. As with investing, one of the keys to rate of return is to reduce transaction costs and other fees. Paying someone else to do what you could VERY EASILY do on your own, for free, makes no sense.
Further, paying extra on your mortgage doesn't always make good financial sense. It depends on a lot of factors. However, for large mortgages, especially early on, paying down the principal quickly probably makes sense. Paying someone a fee for the life of your loan, after all the fees that come with buying and owning a house? That's just silly.
As for me, you asked for honesty, so I'll say that I actually pay more than 30% extra on each monthly payment. I'm currently paying the equivalent of about 4 months worth of extra payments each year. My mortgage is small relative to my income, but my principal was large. It makes a lot of financial sense to pay it down now, since, despite low rate, the large principal creates a larger amount of interest than I can earn investing elsewhere. But that calculation may not be true for everyone.
And I don't do it using gimmicky "bi-weekly" administration programs. I simply take the amount I want to pay, automatically, out of my bank acount, at each pay cycle. This amount currently includes my full payment, and a fixed additional amount that I can afford. It costs me nothing to do this, and I can afford to do it. But someone who can barely afford to pay anything extra, or who feels they have betters uses for that money, should not be giving you money for providing absolutely no real service in return.
Would you pay a person to help you pay more than the minimum payment on your credit card? It's exactly the same thing.
