I just received an offer in the mail from my mortgage company. It is to inform me that a terrific program is available which will automatically save me thousands of dollars in scheduled mortgage interest payments. I know a little something about mortgage financing, so let’s break it down and see if it makes sense.
The announcement suggests that instead of making a full mortgage payment each month, I make half a payment every 14 days. That means that rather than make the 12 scheduled mortgage payments, I will make 26 half payments, equal to 13 full monthly payments. For the privilege of helping me prepay my mortgage the lender will only charge me $275.00 to set it up and a monthly maintenance fee of $12.95. Once enrolled, the lender will automatically deduct half my mortgage payment every 2 weeks.
Example:
Current mortgage
You have a mortgage of 275,000 for 30 years
Your monthly principle and interest payment is $1738.00
Your total interest paid after 30 years is $355,752
BiWeekly Plan
Payment is $869.00 every 14 days (a month)
Mortgage is paid off 6 years sooner
125,136 in mortgage payments saved
Before you enroll ask yourself these questions
1) Do I want to raise my payments $145.00 dollars per month?
2) How long will I be in this house? Long enough to pay off the mortgage?
3) Do I want to pay my mortgage company 275.00 and 12.95 per month to pay them twice a month?
4) If I am interested in prepaying the principle and saving a fortune is there a better way to do it?
Yes
1) If you add 145.00 to your current mortgage payment each month you have accomplished the same thing. No charge.
2) Depending on your current interest rate and mortgage balance you may be able to refinance your mortgage for 15 years without increasing your mortgage payment.
If you would like to enjoy the confidence of knowing that the most qualified mortgage specialists in the business are working on your behalf, please call Jason Holter with ProLending Mortgage to make an appointment. The office phone number is 281.212.7076. You may also email me at jholter@prolendingmortgage.com or visit my website at www.yourclearlakemortgage.com.