Question on Biweekly Payments

Quote from Brian1 : I wouldn't rush to pay that off.

You give excellent advice here, but I always disagree with this one.

Not because it's wrong from a purely financial standpoint, just because it's hard to quantify the freedom that exists from not having any debts.

I'm almost there and the feeling is coming on strong.

Quote from vaultaddict : You give excellent advice here, but I always disagree with this one. Not because it's wrong from a purely financial standpoint, just because it's hard to quantify the freedom that exists from not having any debts. I'm almost there and the feeling is coming on strong.

Thanks a lot for the kind words.

I can't argue with paying off a mortgage as soon as possible. Believe me, I know exactly how you feel. I despise debt.

That being said, to me, the long-term idea of even more freedom down the road by not rushing to pay down such cheap (practically free) money outweighs the option of paying it down as soon as possible.

[QUOTE=jostle;56929050]You are making it more complicated, just pay an extra $100, $200, $300, etc a month towards the principal. You could also think of it as having a car payment, but if you actually do have a care payment this may spread you too thin. If your making more money on interest via other means above 3.7.....

Most people have a mortgage for 15/20/30 years...you may have a lower rate on your mortgage than on other debt like credit cards, but paying 3.75 over the life of 20 or 30 years equals out to thousands and thousands of dollars!!!! Paying extra on credit cards instead of your mortgage seems like a money saver up front.. but it can cost you thousands in the long term!!! Make consistent monthly principle only payments every month and double check your mortgage holder's policy on principle only payments...i.e. payment address (w/principle only payments, it may need to go to a different dept., penalties possible involved with any prepayments or early payoff policy, ALWAYS write a separate check for principle only payments and WRITE PRINCIPLE ONLY on the memo line with your loan number....just my 2 cents

ALSO..."I wouldn't rush to pay that off..." Just my opinion, BAD BAD ADVICE!!

My mortgagee offers this. It is called Equity Accelerator. Contact your mortgagee to see if they offer it.

Quote from judybinx : You are making it more complicated, just pay an extra $100, $200, $300, etc a month towards the principal. You could also think of it as having a car payment, but if you actually do have a care payment this may spread you too thin. If your making more money on interest via other means above 3.7..... Most people have a mortgage for 15/20/30 years...you may have a lower rate on your mortgage than on other debt like credit cards, but paying 3.75 over the life of 20 or 30 years equals out to thousands and thousands of dollars!!!! Paying extra on credit cards instead of your mortgage seems like a money saver up front.. but it can cost you thousands in the long term!!! Make consistent monthly principle only payments every month and double check your mortgage holder's policy on principle only payments...i.e. payment address (w/principle only payments, it may need to go to a different dept., penalties possible involved with any prepayments or early payoff policy, ALWAYS write a separate check for principle only payments and WRITE PRINCIPLE ONLY on the memo line with your loan number....just my 2 cents ALSO..."I wouldn't rush to pay that off..." Just my opinion, BAD BAD ADVICE!!

you're correct that interest does add up over time. your mortgage should have told you how much you'll pay in total, actually. if not, it's easy to use mortgage calculators to tell you. that said, with such a low interest rate, you may be able to (read, should be able to) use the money you would pay towards principal and invest it in such a way that you will come out ahead in the end.

IOW, pay $5 now and that'll save you $14 after 30 years. Invest it and at 5% return, it'll be worth over $20. So you may be better off investing in something else other than your home.

Quote from Brian1 : Thanks a lot for the kind words. I can't argue with paying off a mortgage as soon as possible. Believe me, I know exactly how you feel. I despise debt. That being said, to me, the long-term idea of even more freedom down the road by not rushing to pay down such cheap (practically free) money outweighs the option of paying it down as soon as possible.

when mortgage rates are high, like they were back in the 80s, it's a no-brainer. When they're low, it's much more personal of a decision. If you prefer the intangible feeling and flexibility of not being in debt, pay principal. If you care about raw numbers, you're almost certain to win with other investments.

Quote from brwright : My mortgagee offers this. It is called Equity Accelerator. Contact your mortgagee to see if they offer it.

If they are charging you for it, then it's called dumb. I hope you don't pay for much a silly program.

Bi-weekly is handy for those people that get paid weekly/bi-weekly.

Quote from BargainSnatcher : Bi-weekly is handy for those people that get paid weekly/bi-weekly.

Only if it's not a paid service, which many places do.

If no charge, then personal preference. But no matter if you get paid weekly/biweekly or once a year it's about budgeting and it shouldn't mattter one iota.