This blog is part of the Series I am writing to expose Corporations whose entire business revolves around “taxing” people who are bad at Math. These companies have great marketing and play on peoples emotions however they are not doing anything that you could not do on your own.
Why Bi-Weekly mortgage payments is a horrible idea…
Sign a new mortgage and you within a few days you get a letter in the mail saying that you can payoff that mortgage faster – in 23 yrs vs the 30 year note that you just signed. The company is playing on your emotions. Yes you have signed a 30 year note and yes you are extremely concerned as this is the most expensive thing you have bought and now you have a monthly mortgage you have to cover . Paying it off 7 years early sounds awesome Now lets look at this and see why this is really bad idea.
There are 52 weeks in a year. The company is collecting every 2 weeks, that equates to 26 half payments. Twenty six half payments equates to 13 full payments.
52 weeks paid bi-weekly = 26 half payments
26 half payments = 13 full payments
You required to pay 12 monthly payments for your mortgage and bi going the bi-weekly route you are making 13 monthly payments.
But that is not all of what you are paying out of pocket – In reality you are paying more. There is a setup fee of $300 – $400 and a monthly process fee or $6. So the first year – you pay an extra $372 in fees just so you can make 13 payments instead of 12. Are you kidding me?
You can make that 13th payment just on your own – all you have to do is write (principal only) on the check so they don’t put the money in your escrow account.
Take the $372 and enjoy it with your family…
Why make any the payments to this company?
jackmehra 