Best strategy for quickly paying off mortgage

Larger payments, not biweekly ones, are the key

Tuesday, September 11, 2007

DEAR BOB: I have frequently heard if your mortgage calls for monthly payments, you can make a significant interest savings if you pay twice monthly. For example, my mortgage payment is due on the first day of each month. I would like to pay half of my monthly payment 15 days before the due date and the remainder on the due date. But my lender says the only way I can do this is through a third-party company, which will then charge me a sign-up fee of several hundred dollars plus a monthly fee. If I just pay the lender twice a month doesn’t the lender have to accept my payments and credit my account when received and then calculate the interest based on my payments? –Arthur L.

DEAR ARTHUR: No. You’ve been hanging around with the wrong crowd. When you obtained your home loan, you agreed to pay monthly payments due on the first day of each month with a grace period of a few days. The lender does not have to accept any payments less than the full amount due each month.

Purchase Bob Bruss reports online.

The plan you describe is called a biweekly mortgage. A few lenders offer these mortgages, but they have not proven to be popular. Full article

Written by charles dennis on September 13th, 2007 with comments disabled.
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