Home Buying & Real Estate Thread

[ekrev98]

The difference between a 15 yr and 30 yr is a lot it's a difference of $900/mo for my loan amount.

You can always pay more towards the mortgage or do bi-weekly payments to pay it down faster

 

[ekrev98]

Versailles pattern flooring all done.

We are currently ahead of schedule and should be done in 3 weeks or less. Did a rendering of what the kitchen will look like. Cabinets should be coming in and we should be knocking that out next week then all that's left is drywall and painting the exterior.

 

[capital sb]

How much is your loan? 900 is a lot

My loan is 330K, no matter what the loan amount is cutting your loan from 30 yrs to 15yrs will be a big difference. I plan on doing a 15yr loan at 30 to be mortgage free by 45.

ekrev98 I know I can make extra payments towards principle, I like this approach a lot.

 

[SneakerProSr.]

I heard bi-weekly payments don't matter.

Just taking a month's payment, dividing by 12 and making that payment extra every month accomplishes the same thing.

This true?

 

[ekrev98]

I heard bi-weekly payments don't matter.

Just taking a month's payment, dividing by 12 and making that payment extra every month accomplishes the same thing.

This true?

Bi weekly payments can save you 8+ years off of your loan and save thousands of dollars. Google it and there are mortgage calculators that will show you the savings and years saved. It's the best way to go IMO if you can afford it.

 

[super t1ght]

That doesnt really answer his question though. Im curious if someone knows that answer. I also inquired about making biweekly payments which my mortgage company said they don't do. Apparently its common for mortgage companies to not allow it? As a work around i paid an extra 1/12th each month so yearly id have paid one extra months payment. Technically i rounded up a lil on my extra payment.
But when i refi'd to a 15 yr conventional (from a 30 fha) my monthly went up a decent amount and i decided to not put in 1/12th extra. I still do some extra but not much. I do need to confirm if my new lender will or will not allow biweekly payments because i may be thinking of one of the others.

 

[ekrev98]

That doesnt really answer his question though. Im curious if someone knows that answer. I also inquired about making biweekly payments which my mortgage company said they don't do. Apparently its common for mortgage companies to not allow it? As a work around i paid an extra 1/12th each month so yearly id have paid one extra months payment. Technically i rounded up a lil on my extra payment.
But when i refi'd to a 15 yr conventional (from a 30 fha) my monthly went up a decent amount and i decided to not put in 1/12th extra. I still do some extra but not much. I do need to confirm if my new lender will or will not allow biweekly payments because i may be thinking of one of the others.

I said to google it so he can a more accurate figure. But here's an example on how bi-weekly can save money/years

 

[super t1ght]

Not questioning if biweekly payments cut down the loan, he was asking if adding 1/12th per month accomplishes the same result

 

[ekrev98]

Not questioning if biweekly payments cut down the loan, he was asking if adding 1/12th per month accomplishes the same result

My bad I misunderstood...adding 1/12 per month pays it off faster than bi-weekly. With a biweekly, it takes a year before additional payments are made to your principal. Only then do you begin saving on interest. It takes a year for biweekly payments to add up to an extra payment. If you increase the monthly payment, principal is reduced starting in the first month, and interest savings begin in the second month.

 

[super t1ght]

That makes sense! Thanks

Make those extra payments fellas!

 

[slicknick951]

I wasnt aware of the ability to set up biweekly payments. I thought you are only able to pay more on the principle. I checked and you can also do weekly and it saves you even more in the long run.

 

[crcballer55]

I heard bi-weekly payments don't matter.

Just taking a month's payment, dividing by 12 and making that payment extra every month accomplishes the same thing.

This true?

The problem with most bi-weekly payment options is that they charge for that "feature". And they will hold on to your money and apply the extra principle either semi-annually or annually. Both options don't make sense financially. If you want to accomplish the goal of paying it off early do like @ekREV98 said and just apply an extra 1/12 to your monthly payment.

 

[slicknick951]

I heard bi-weekly payments don't matter.


Just taking a month's payment, dividing by 12 and making that payment extra every month accomplishes the same thing.


This true?

The problem with most bi-weekly payment options is that they charge for that "feature". And they will hold on to your money and apply the extra principle either semi-annually or annually. Both options don't make sense financially. If you want to accomplish the goal of paying it off early do like @ekREV98
said and just apply an extra 1/12 to your monthly payment.

On wells fargo site it says its free.

Why wouldn't it be a good idea to do this at the min because according to the amortization rate chart you pay off the loan a few years early?

Then if you can afford extra payments to the principle you can do that on top of the bi weekly to finish paying off even faster than the few years.


I might be missing something so im just trying to understand

 

[super t1ght]

^ checks out to me. Make those extra payments and if you can pay bi weekly, with no fees, why not? Im gonna check out my lender too.

 

[capital sb]

Bi weekly payments can save you 8+ years off of your loan and save thousands of dollars. Google it and there are mortgage calculators that will show you the savings and years saved. It's the best way to go IMO if you can afford it.

ONLY if you have a high interest rate. This same logic does not work with current low interest rates. One extra monthly payment/ bi weekly payments will not shave 8 years off of a <4% mortgage, I believe it is closer to 2-4 years haven't looked in a few months.

 

[SneakerProSr.]

Bi weekly payments can save you 8+ years off of your loan and save thousands of dollars. Google it and there are mortgage calculators that will show you the savings and years saved. It's the best way to go IMO if you can afford it.

ONLY if you have a high interest rate. This same logic does not work with current low interest rates. One extra monthly payment/ bi weekly payments will not shave 8 years off of a

 

[ekrev98]

ONLY if you have a high interest rate. This same logic does not work with current low interest rates. One extra monthly payment/ bi weekly payments will not shave 8 years off of a

 

[capital sb]

Just putting it out there, because a lot of lenders throw around that same 8 year number and it isn't accurate with current rates.

Most people have had plenty of time to refi from their 7% mortgages

 

[crcballer55]

 

 

I heard bi-weekly payments don't matter.


Just taking a month's payment, dividing by 12 and making that payment extra every month accomplishes the same thing.


This true?

The problem with most bi-weekly payment options is that they charge for that "feature". And they will hold on to your money and apply the extra principle either semi-annually or annually. Both options don't make sense financially. If you want to accomplish the goal of paying it off early do like @ekREV98
said and just apply an extra 1/12 to your monthly payment.

On wells fargo site it says its free.

Why wouldn't it be a good idea to do this at the min because according to the amortization rate chart you pay off the loan a few years early?

Then if you can afford extra payments to the principle you can do that on top of the bi weekly to finish paying off even faster than the few years.


I might be missing something so im just trying to understand

Are you sure the payments are actually applied when they're made? Personally, from past experience I wouldn't trust Wells Fargo. I was already burned once by them when I was younger.

After looking on the site, my assumption of those snakes was confirmed. They only apply it quarterly or semi-annually to your principle despite already having your money. Looks like a lot of people fell for the trap without knowing the full details.

Payments made weekly, every two weeks and twice a month are treated as partial payments and may not be applied to your mortgage until full payment is received. A partial payment is anything less than the amount due on your billing statement.

However, if you schedule withdrawals weekly or every two weeks we will reduce your principal loan balance an additional two to four times per year by applying your partial payment. Twice a month withdrawals do not create additional partial payments that can be applied to reducing your principal loan balance.

 

[slicknick951]

 

 

I heard bi-weekly payments don't matter.



Just taking a month's payment, dividing by 12 and making that payment extra every month accomplishes the same thing.



This true?

The problem with most bi-weekly payment options is that they charge for that "feature". And they will hold on to your money and apply the extra principle either semi-annually or annually. Both options don't make sense financially. If you want to accomplish the goal of paying it off early do like @ekREV98


said and just apply an extra 1/12 to your monthly payment.

On wells fargo site it says its free.


Why wouldn't it be a good idea to do this at the min because according to the amortization rate chart you pay off the loan a few years early?


Then if you can afford extra payments to the principle you can do that on top of the bi weekly to finish paying off even faster than the few years.



I might be missing something so im just trying to understand

Are you sure the payments are actually applied when they're made? Personally, from past experience I wouldn't trust Wells Fargo. I was already burned once by them when I was younger.

After looking on the site, my assumption of those snakes was confirmed. They only apply it quarterly or semi-annually to your principle despite already having your money. Looks like a lot of people fell for the trap without knowing the full details.


 

Payments made weekly, every two weeks and twice a month are treated as partial payments and may not be applied to your mortgage until full payment is received. A partial payment is anything less than the amount due on your billing statement.

However, if you schedule withdrawals weekly or every two weeks we will reduce your principal loan balance an additional two to four times per year by applying your partial payment. Twice a month withdrawals do not create additional partial payments that can be applied to reducing your principal loan balance.

sorry for all the questions but im just trying to fully understand


So they take your money then when the term kicks in they apply all the money you paid over the time towards the principle.

So for ease of numbers your rent is 2000 split into two so 1000 a month goes into their holdings. Then after the 6 months they apply 6000 towards the principle?

 

[crcballer55]

 

 

 

 

I heard bi-weekly payments don't matter.



Just taking a month's payment, dividing by 12 and making that payment extra every month accomplishes the same thing.



This true?

The problem with most bi-weekly payment options is that they charge for that "feature". And they will hold on to your money and apply the extra principle either semi-annually or annually. Both options don't make sense financially. If you want to accomplish the goal of paying it off early do like @ekREV98


said and just apply an extra 1/12 to your monthly payment.

On wells fargo site it says its free.


Why wouldn't it be a good idea to do this at the min because according to the amortization rate chart you pay off the loan a few years early?


Then if you can afford extra payments to the principle you can do that on top of the bi weekly to finish paying off even faster than the few years.



I might be missing something so im just trying to understand

Are you sure the payments are actually applied when they're made? Personally, from past experience I wouldn't trust Wells Fargo. I was already burned once by them when I was younger.

After looking on the site, my assumption of those snakes was confirmed. They only apply it quarterly or semi-annually to your principle despite already having your money. Looks like a lot of people fell for the trap without knowing the full details.


 

Payments made weekly, every two weeks and twice a month are treated as partial payments and may not be applied to your mortgage until full payment is received. A partial payment is anything less than the amount due on your billing statement.

However, if you schedule withdrawals weekly or every two weeks we will reduce your principal loan balance an additional two to four times per year by applying your partial payment. Twice a month withdrawals do not create additional partial payments that can be applied to reducing your principal loan balance.

sorry for all the questions but im just trying to fully understand


So they take your money then when the term kicks in they apply all the money you paid over the time towards the principle.

So for ease of numbers your rent is 2000 split into two so 1000 a month goes into their holdings. Then after the 6 months they apply 6000 towards the principle?

I'm assuming the $2000 is your total mortgage, right? That means a normal payment over the year would be $24,000 without any additional payments. If you make an extra payment, you'll pay $26,000 over the year or $1000 every other week. So instead of you adding a normal payment with the additional principle of $166.67 ($2000/12), They'll take that $166.67 and apply it to your principle every quarter or semi-annually instead of you making the extra payment and having it applied to your principle right away.

In short, you'll come out ahead by just dividing an extra payment up and applying it yourself to your normal payment as "Principle only". I've heard of some banks taking it and applying it to the interest of the loan instead, so I would make sure they're clear (especially if you're dealing with a larger bank like WF)

So an extra payment would be $2000 divided by 12 is $166.67. That means you would give them

 

[super t1ght]

Quote: I've heard of some banks taking it and applying it to the interest of the loan instead, so I would make sure they're clear



I think my wife's credit union was doing this on her car payment, despite her calling to tell them multiple times to apply the overpayment to the principle. Grow financial CU fwiw.

 

[capital sb]

Mad shady how banks do this.

 

[crcballer55]

 
Mad shady how banks do this.

I would have fallen for the same thing had I not known how it actually worked. After we refinanced, an outside company contacted us about bi-weekly payments. After I told him no, he tried to tell me how uneducated I was and how my numbers didn't make sense. Umm... No, I'm not going to pay you $500 and $2 extra every month to do what I can do for free (and with better results for that matter. Plus I don't do business with people who forget who pays their bills and try to belittle me for not giving them MY money.

Edit: Is this what being Bernie Sanders feels like? I'm feeling a little fired up about how shady some banks are after the last couple posts.

 

[capital sb]

 
I would have fallen for the same thing had I not known how it actually worked. After we refinanced, an outside company contacted us about bi-weekly payments. After I told him no, he tried to tell me how uneducated I was and how my numbers didn't make sense. Umm... No, I'm not going to pay you $500 and $2 extra every month to do what I can do for free (and with better results for that matter. Plus I don't do business with people who forget who pays their bills and try to belittle me for not giving them MY money.

Edit: Is this what being Bernie Sanders feels like? I'm feeling a little fired up about how shady some banks are after the last couple posts.

 aye man my rule is "Never trust a salesman". You must do your own research they have the companies best interest in mind not yours.

The holding of payments makes me like the 15yr mortgage much more. Too many games when trying to apply extra payments to principle yourself.

Guess I will see what my best option is with Navy fed, Pen fed, and Tower fed when the time comes.