Do you have a 30-year mortgage? The problem with a 30-year mortgage is that it's designed to make you spend 30 years paying it off! Say you buy a home with a $300,000 mortgage at 7%. Paying it off over 30 years will wind up costing you close to $720,000. But, call your lender and sign up for a bi-weekly mortgage plan -- you'll cut the term of your loan by 7 years and save $106,000 in interest! How? Instead of making your monthly payment once a month, use a bi-weekly mortgage plan to pay half every two weeks. By year's end you've paid the equivalent of 13 monthly payments instead of 12.
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Why not do this on your own (instead of calling your bank) and avoid the associated fees?
Posted by: Charles | October 11, 2007 at 06:25 AM
I have recently become involved with another mortgage acceleration program called the Money Merge Account offered by United First Financial. My tipping point came after reading a comment in one of your articles about how people who pay off their mortgages early retire 5-10 years earlier than those who don't. So I stopped trying to figure out if it was best to put my extra money in savings or pay down my mortgage. I signed up for this program and it seems to be working so well. The program says I should have my mortgage paid off in 9.5 more years (that's 15 years early).
Posted by: Diane Morrissette | October 12, 2007 at 10:40 AM