I pay bimonthly but don't be fooled. The bank takes your money but does not apply the partial payment until the second payment is made. Not sure how banks get away with this but if the partial payments were applied the day they were withdrawn from your account , you'd pay even less interest. Banks are no different than organized crime
What a shady practices they do! I just noticed that on my statements and was so upset about it. In fact, I called but they were so busy I could not talk to them and said to myself, "In the meantime, look it up, perhaps that is the practice to crew the customer." And unfortunately I found your comment. Grrrr! Thanks though.
My lender required a form to be completed and auto-payment to be set up. If i were to have just paid manually, it would have been as you described. They also required to be one months ahead.
So I thought you had to have it in writing that your extra payment goes toward the principal, otherwise the bank will just put it toward interest cause they want their money first
by paying by-weekly, you are just making an extra monthly payment per year. This will shave years of your loan, but you can pay monthly and also make an extra payment per year to achieve basically the same result.
@@mackredenbarger The whole concept of saving interest by paying off your mortgage faster seems like mind games to me. You're not actually saving money; you're actually spending MORE money but doing it in such a way that you don't notice it. Here's one reason NOT repay your mortgage early. Let's say I have $50k of principal outstanding on my mortgage. By lending me that money at 3.5%, which is typical for people who bought a home in recent decades, the bank enables me to invest that $50k elsewhere, and most investment vehicles will have a return of greater than 3.5%. If I repay the loan early, my monthly housing payments will end, but I will also lose that $50k, which the bank had been lending me so cheaply, and I'll miss the opportunity to invest that money more profitably elsewhere.
@@mackredenbargeryeah but you can still just add up those 2 extra payments, divide by 12, and add that number to your mortgage payment payment… again, all you are doing is maybe an extra payment. But now you have to be bothered twice as much to make the payment.
I use a strategy called give all my money to the bank instead of going on vacation 😂. I’ve paid off 9% of my 30 year mortgage this year alone and it’s only July.
Same here. I’m using the same strategy. I call myself “voluntarily house poor” because every penny goes into extra payments. Vacations are reduced, extra expenses are reduced. I’m even working overtime and going on company sponsored events if they get me extra money. For me, that’s the best strategy because having a mortgage is like walking with an anvil on my back. But that’s personal, if you’re comfortable with debt, this isn’t the best strategy as that extra money could easily be invested in a higher returning investment vehicle.
So I just started paying ahead of time each month plus a little extra and they keep sending me a new statement quicker and quicker which this next one today will be two months ahead. I’m figuring every time I make them recalculate the interest it’s now on a lower amount each time so paying it earlier(if you have it) has to help in the long run. Credit score wise paying early helps too.
Bro what's even better is pay your regular payment every month take that so called extra month payment divide it by 12 and just pay that directly to your principal that's faster than what he is saying 😮
Both seem to pay an extra month each year. I am curious whether paying bi-weekly vs. monthly/12 saves more on interest. Is there a spreadsheet that proves this?
I can't for the life of me find where you gave 3 software recommendations to help chart your mortgage and loans. Would you share them again here, please?
We pay our mortgage weekly (52 payments per year) and our bank charges no fee to do so, however, the weekly payments are made in advance of the monthly due date and held aside by the bank until it is applied to the loan on the monthly due date. The bank calls the weekly payments "unapplied funds" until the sum reaches the sufficient monthly amount. So, are we really saving any money?
But those 2 extra payments you make dontn they incur interest? I was thinking of doing monthly and make 1 extra lump sum payment at the end of the year that would go Right to the principal.
The interest rates are the same regardless of if you pay monthly or biweekly. You are correct. If you make an extra payment directly to the principal, you will get a similar result.
I am thinking the most optimal way might be pay monthly amount + (monthly amount/12 to principal) every month. Maybe breaking it in chunks every month saves in more interest than a lump sum at the end due to "compound interest".
i have Pennymac and they said if i do bi-weekly payment i can't add extra to principal payment but with monthly i can, do you know why i can't add extra principal payment on biweekly? and if so which is better? i plan on adding extra principal whenever i want so which you recommended ?
I don’t think there is anything wrong with either approach … the more you pay toward the principal and the earlier you do it, the quicker your mortgage disappears
Correct me if I'm wrong, but isn't there more to gain by paying bi-weekly than what the video alludes to? Specifically, if I pay 1/2 my mortgage payment 2 weeks before it's due, the compounded amount is lower for the 2 weeks that follow than it would be otherwise.
1. How much insterst do you save by paying bi-weekly? 2. Is each bi-weekly payment contain same proportion of interest/principal payment as a monthly payment?
I just set up by biweekly payment. In my letter from my mortgage company it said they would be holding the first biweekly each month until the second one is received and then they would apply i guess to the loan. Is this normal?
Each lender tends to have their own way of doing things. If you feel uncertain about it going to the right place, you could also skip the biweekly payment idea and just manually make extra payments toward your principal each month (or when you have the extra money). That's what we did. We became mortgage free in less than 5 years doing that. Here's how we did it: th-cam.com/video/nPXXHTMHlxA/w-d-xo.html
What’s the point of paying down interest if you’re just going to refinance in a few years unless you have a low payment even then are you only getting money back in 20years that you could buy another house with?
What do you think of biweekly mortgage payments?
I pay bimonthly but don't be fooled. The bank takes your money but does not apply the partial payment until the second payment is made. Not sure how banks get away with this but if the partial payments were applied the day they were withdrawn from your account , you'd pay even less interest. Banks are no different than organized crime
Wow... Had no clue... Because car payments aren't like this. Guess it may be better to just go in manually and make extra payments to the principal?
What a shady practices they do! I just noticed that on my statements and was so upset about it. In fact, I called but they were so busy I could not talk to them and said to myself, "In the meantime, look it up, perhaps that is the practice to crew the customer." And unfortunately I found your comment. Grrrr! Thanks though.
My lender required a form to be completed and auto-payment to be set up. If i were to have just paid manually, it would have been as you described. They also required to be one months ahead.
You are spot on correct 🎯
So I thought you had to have it in writing that your extra payment goes toward the principal, otherwise the bank will just put it toward interest cause they want their money first
by paying by-weekly, you are just making an extra monthly payment per year. This will shave years of your loan, but you can pay monthly and also make an extra payment per year to achieve basically the same result.
Yeah but why not do both! Pay bi weekly and extra payments so your money works even harder for you:)
@@mackredenbarger The whole concept of saving interest by paying off your mortgage faster seems like mind games to me. You're not actually saving money; you're actually spending MORE money but doing it in such a way that you don't notice it.
Here's one reason NOT repay your mortgage early. Let's say I have $50k of principal outstanding on my mortgage. By lending me that money at 3.5%, which is typical for people who bought a home in recent decades, the bank enables me to invest that $50k elsewhere, and most investment vehicles will have a return of greater than 3.5%. If I repay the loan early, my monthly housing payments will end, but I will also lose that $50k, which the bank had been lending me so cheaply, and I'll miss the opportunity to invest that money more profitably elsewhere.
@@mackredenbargeryeah but you can still just add up those 2 extra payments, divide by 12, and add that number to your mortgage payment payment… again, all you are doing is maybe an extra payment.
But now you have to be bothered twice as much to make the payment.
I use a strategy called give all my money to the bank instead of going on vacation 😂. I’ve paid off 9% of my 30 year mortgage this year alone and it’s only July.
Solid strategy!
Same here. I’m using the same strategy. I call myself “voluntarily house poor” because every penny goes into extra payments. Vacations are reduced, extra expenses are reduced. I’m even working overtime and going on company sponsored events if they get me extra money. For me, that’s the best strategy because having a mortgage is like walking with an anvil on my back. But that’s personal, if you’re comfortable with debt, this isn’t the best strategy as that extra money could easily be invested in a higher returning investment vehicle.
I do biweekly payments plus $150 extra per payment. It’s great for budgeting as well as knocking down the interest. Thanks for the video!!!
Your plan sounds awesome Ramona! Keep us posted on the paydown process!
I pay accelerated weekly payments. And pay an additional 1k per month towards the principle on top of my regular payments.
You'll enjoy that forward thinking in the long run!
I prefer no payments. $722K left. But started at $903K in January. Will be at $636K by January. Kind of daunting, but making progress.
That's a big hill to climb! Based on your income, you've got this ...
@@MarriageKidsandMoney Thanks, you guys!
Wow! What do you do for a living? That is Amazing!
@@n0c_n0c lawyer and artist.
Go for it!!!
So I just started paying ahead of time each month plus a little extra and they keep sending me a new statement quicker and quicker which this next one today will be two months ahead. I’m figuring every time I make them recalculate the interest it’s now on a lower amount each time so paying it earlier(if you have it) has to help in the long run. Credit score wise paying early helps too.
I used a calculated 72 month loan at 2.9% for $37000. If I pay $1k/mo, that 72 month loan will be paid in 23 months! thanks for the rabbit hole! :)
Anytime! Best of luck to you!
2.9 in this economy?
@@jaegermane2833yeah I call that bs…
Thanks for the help and info.
Happy to support your journey!
Bro what's even better is pay your regular payment every month take that so called extra month payment divide it by 12 and just pay that directly to your principal that's faster than what he is saying 😮
Both seem to pay an extra month each year. I am curious whether paying bi-weekly vs. monthly/12 saves more on interest. Is there a spreadsheet that proves this?
Great idea, biweekly, increased payment and lumpsum.
It works!
Sounds good! Thanks for explaining that so simply! 😊
Glad you enjoyed the video!
Great Info got me seriously thinking of going bi weekly
Glad to hear it was helpful!
now do a video on how to scrouge 3000 extra a month when your net monthly income is 3000 thanks
Great explanation, thanks!
Glad it was helpful!
I liked the graphs and charts
Thanks, you made this very easy to understand.
Glad to hear that Jessy!
Best video I have seen explaining this mortgage payment method! Thank you so much! 🙏🏼👍🏼😃
Thanks so much Luna! I'm glad it was helpful!
time to do some research.
thanks
Good luck Sean!
I can't for the life of me find where you gave 3 software recommendations to help chart your mortgage and loans. Would you share them again here, please?
Thanks!!
Glad it was helpful!
We pay our mortgage weekly (52 payments per year) and our bank charges no fee to do so, however, the weekly payments are made in advance of the monthly due date and held aside by the bank until it is applied to the loan on the monthly due date. The bank calls the weekly payments "unapplied funds" until the sum reaches the sufficient monthly amount. So, are we really saving any money?
Doesn’t sound like it. I’m wondering if it makes sense for me to go bi weekly.
No. The bank is screwing you out of all the savings you should be earning
But those 2 extra payments you make dontn they incur interest? I was thinking of doing monthly and make 1 extra lump sum payment at the end of the year that would go Right to the principal.
The interest rates are the same regardless of if you pay monthly or biweekly. You are correct. If you make an extra payment directly to the principal, you will get a similar result.
I am thinking the most optimal way might be pay monthly amount + (monthly amount/12 to principal) every month. Maybe breaking it in chunks every month saves in more interest than a lump sum at the end due to "compound interest".
@@LittleMopeHead🎯
i have Pennymac and they said if i do bi-weekly payment i can't add extra to principal payment but with monthly i can, do you know why i can't add extra principal payment on biweekly? and if so which is better? i plan on adding extra principal whenever i want so which you recommended ?
We just took our payment divided by 12 and pay that extra each month so we are making an extra payment each year. Idk 🤷🏻♀️
Cool info. Thanks!
Of course!
What is the difference bt paying biweekly and adding a little bit each month to equal an extra payment every year?
I don’t think there is anything wrong with either approach … the more you pay toward the principal and the earlier you do it, the quicker your mortgage disappears
Thank you. I've been adding the equivalent of an extra payment and it projects to save about 5.5 years worth of payments
I get paid on the 25th and mortgage is due the first. How do I pay since I can’t do biweekly
Correct me if I'm wrong, but isn't there more to gain by paying bi-weekly than what the video alludes to? Specifically, if I pay 1/2 my mortgage payment 2 weeks before it's due, the compounded amount is lower for the 2 weeks that follow than it would be otherwise.
Depends on your bank's calculations of the extra funds you send them and how they are applied.
1. How much insterst do you save by paying bi-weekly?
2. Is each bi-weekly payment contain same proportion of interest/principal payment as a monthly payment?
But how I do the by weekly, paying exactly half of the monthly payment, interest and principal?
also intersted.
I don’t plan on living in my house longer than 10 years.
I still don't understand. How do you divide $24,000 by 26 and get $1000/fortnight? I get $923.
it's not 24,000.00 it's actually 26,000.00. He's saying the extra $2000.00 goes towards principal.
nice!
I just set up by biweekly payment. In my letter from my mortgage company it said they would be holding the first biweekly each month until the second one is received and then they would apply i guess to the loan. Is this normal?
Each lender tends to have their own way of doing things. If you feel uncertain about it going to the right place, you could also skip the biweekly payment idea and just manually make extra payments toward your principal each month (or when you have the extra money).
That's what we did. We became mortgage free in less than 5 years doing that. Here's how we did it: th-cam.com/video/nPXXHTMHlxA/w-d-xo.html
Sounds a lot like Owen Wilson 😂
I've heard that more than once since I started this channel!
I'll take it as a compliment!
Now I can't unhear it ....
You still have to pay home insurance and property taxes 🤣🤣🤣
Very true! You don't want to stop paying either of those for sure.
What’s the point of paying down interest if you’re just going to refinance in a few years unless you have a low payment even then are you only getting money back in 20years that you could buy another house with?
No point
What about paying two extra mortgage payments per year written towards interest?
If your goal is to become mortgage-free, you should focus extra payments on the mortgage principal.
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Yy
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