Mortgagors have an agreed date for payment each month with their lender with a grace period of a few days. Some mortgagors would prefer to pay half of their monthly payment 15 days prior and the remainder on the due date. Your lender says this can done, but through a third party company, which will charge you a sign up fee for several hundreds of dollars plus a monthly fee. There are third party companies for a fee that will deduct from your checking or saving account half of your regular principal and interest payment every two weeks. This will equate to 13 monthly payments for 12 months, thus shortening your note by at least 7 years and saving a huge amount of money. Here's the catch you can do this yourself at no extra charge. Simply divide your monthly mortgage principal and interest by 12 and add that amount to your monthly mortgage payment. Example your mortgage payment is $2400 a month divide that amount by 12 resulting in $200.00 this is the amount you will pay to shorten your note. Your lender will have to accept your payment as well and this how you can shorten your mortgage.
/ - York, PA
An extra payment a year is very good advice on shortening your mortgage. People look for all kinds of ways to shorten their mortgage but I think this one is one of the best.
Oct 14, 2007 09:53 PM
DDR Realty - Newburgh, NY
Orange County NY
The concept of shortening the term of the mortgage is good and can be done in differents ways. This method would work if one could afford an extra $200.00 per month and has the discipline to make the payment on a consistent bases.
Oct 14, 2007 10:28 PM
Palm Beach Gardens, FL
Larry, Thanks for passing the info on. I have not heard of anyone charging you a fee to do this for you. But why would anyone with a brain pay that? Like you said they can do it themselves.
Oct 14, 2007 10:41 PM
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