kevin@gitpyr.UUCP (Kevin Campbell) (11/18/85)
I have been following the articles that have been posted concerning
bisemi-monty mortgage payments, and how they cut your interest, and number
of years.
I recently read an article in Better Homes & Gardens (I believe it was the
Novemeber issue) concerning mortgages. They had an interesting suggestion.
Evidently there are some banks that will allow you to make payments bi-weekly
at approximately 1/2 of your normal monthly mortgage payment. This has an
advantage, because by paying every 2 weeks, you actually make the equivalent
of 13 monthly payments in a year. Which means in 12 years, you have made
13 years worth of payments, and saved a considerable amount of interest.
Just a thought...
--
Kevin Campbell
Office of Computing Services
Office Of Telecommunications and Networking
Georgia Institute of Technology
Atlanta, Georgia 30332
...!{akgua,allegra,amd,hplabs,ihnp4,seismo,ut-ngp}!gatech!gitpyr!kevin
...!{rlgvax,sbl,uf-cgrl,unmvax,ut-sally}!gatech!gitpyr!kevinfred@mot.UUCP (Fred Christiansen) (11/21/85)
> advantage, because by paying every 2 weeks, you actually make the equivalent > of 13 monthly payments in a year. Which means in 12 years, you have made > 13 years worth of payments, and saved a considerable amount of interest. > -- > Kevin Campbell any time you plunk more money than required onto the principal of the mortgage (presuming that this is useful, as in all FHA and VA mortgages, as well as many conventionals), you are going to save interest and build equity. a couple years back there was this ad in WSJ on how you could save $100,000 or more on your mortgage, just send it $10 to learn how. since the ad was rerun consistently, i bit and send it my $10. what i received was a single sheet, print on both sides, demonstrating how putting $10 or $20 or ... per month could save you gobs of $$ in interest, build equity, and payoff your mortgage in 12 - 20 years (depending, of course, on extra $$). -- << Generic disclaimer >> Fred Christiansen ("Canajun, eh?") @ Motorola Microsystems, Tempe, AZ UUCP: {seismo!terak, trwrb!flkvax, utzoo!mnetor, ihnp4, attunix}!mot!fred ARPA: oakhill!mot!fred@ut-sally.ARPA "Families are Forever"
danz@hplsla.UUCP (danz) (11/26/85)
I should probably go off an punch on my calculator a while before I shoot . . . but I never learn . . . The ROUGH figures I have heard is that paying bi-weekly instead of monthly will cut a 30 year loan to 18 years and save GOBS of money. (I can probably figure this out exactly if pressed). Another possibility to consider is a 15 year mortgage. The 15 year varieties have one big advantage over the paying more payments on a 30 year loan -- the interest rate is lower. In my case, because of the lower interest rate, our payment is only about 11% higher than that for a 30 year loan, yet we will pay off the loan in 1/2 the time and a fraction of the interest cost. Dan. @HP-Lake Stevens Instrument Division hplsla!labdjz!danz
ark@alice.UucP (Andrew Koenig) (11/28/85)
> The ROUGH figures I have heard is that paying bi-weekly instead of > monthly will cut a 30 year loan to 18 years and save GOBS of money. > (I can probably figure this out exactly if pressed). Yes and no. Yes, you'll cut the term to 18 years. No, you won't necessarily save GOBS of money. You have to figure the net present value of your outlays each way, and you have to base that on some kind of interest rate. If the rate is 0, then yes you'll save gobs. If the rate is greater than your mortgage rate, you'll lose gobs. If the rate is the same, it's a wash. Whether you should pay off quickly or not depends on what else you would do with the money. For instance, if you were to pay more slowly and invest the excess in, say, tax-free municipal bonds at an interest rate greater than your mortgage interest rate times your marginal tax rate, then you'd come out ahead.