Paying a mortgage payment twice a month

  • Thread starter Ed Hansberry, MS-MVP/Mobile Devices
  • Start date

E

Ed Hansberry, MS-MVP/Mobile Devices

I am considering doing the thing where you can pay half of your
mortgage twice a month, which allows you to accelerate principal
payments and reduce interest paymenets.

I have Money Plus and cannot figure out how to set this up where
Money will track the principal and interest. WHen I go in to
modify the loan, it assumes monthly payments. Is there any way to
do this?
--
__________________________________________________________________________________
Ed Hansberry (Please do *NOT* email me. Post here for the benefit of all)
What is on my Pocket PC? http://www.ehansberry.com/
Microsoft MVP - Mobile Devices www.pocketpc.com
What is an MVP? - http://mvp.support.microsoft.com/
 
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C

Cal Learner-- MVP

In microsoft.public.money, Ed Hansberry, MS-MVP/Mobile Devices
wrote:
I am considering doing the thing where you can pay half of your
mortgage twice a month, which allows you to accelerate principal
payments and reduce interest paymenets.
I know it is not what you are asking, but if it is not directly with
your lender, but is rather with a third party who sends the monthly
payments on your behalf, it is probably not as good of a deal as it
seems.

To properly track that, you could set up an account, and show your
payments as a Transfer to that account. Then have the payments made
on your behalf entered into that account as a mortgage payment.
I have Money Plus and cannot figure out how to set this up where
Money will track the principal and interest. WHen I go in to
modify the loan, it assumes monthly payments. Is there any way to
do this?
If it is with your bank with new terms, then it would be set up as a
refi, I think. See http://umpmfaq.info/faq.html#Q86
 
E

Ed Hansberry, MS-MVP/Mobile Devices

Cal Learner-- MVP said:
In microsoft.public.money, Ed Hansberry, MS-MVP/Mobile Devices
wrote:


I know it is not what you are asking, but if it is not directly with
your lender, but is rather with a third party who sends the monthly
payments on your behalf, it is probably not as good of a deal as it
seems.

To properly track that, you could set up an account, and show your
payments as a Transfer to that account. Then have the payments made
on your behalf entered into that account as a mortgage payment.


If it is with your bank with new terms, then it would be set up as a
refi, I think. See http://umpmfaq.info/faq.html#Q86
It is with my lender. I just pay 24 times a year instead of 12.
The advance payment on 50% of my principal by 15 days each month
halts the interest on that portion immediately, so it is a good
deal.

I'll have to look at the refi FAQ you listed in detail, but on
the surface, this isn't a refi, and quickly scanning that, I
don't see where to enter the payment frequency, as Money
generally assumes 1x per month.
--
__________________________________________________________________________________
Ed Hansberry (Please do *NOT* email me. Post here for the benefit of all)
What is on my Pocket PC? http://www.ehansberry.com/
Microsoft MVP - Mobile Devices www.pocketpc.com
What is an MVP? - http://mvp.support.microsoft.com/
 
D

Dick Watson

Well you can set that payment frequency on a new loan. But you can't change
a pre-existing loan. I'm pretty sure refi isn't a good strategy. What I'm
less sure of, without a lot of work on test cases, is what is a good
strategy for what you want to do.
 
C

Chris Cowles

It is with my lender. I just pay 24 times a year instead of 12.
The advance payment on 50% of my principal by 15 days each month
halts the interest on that portion immediately, so it is a good
deal.
I believe a separately scheduled monthly principal transfer will
accomplish what you want, but I know of no way to schedule it through
the amortization program in a manner that reflects what the bank does
with the money. When the regular loan payment posts, it will calculate
the interest on the balance at that moment. The problem is the interest
should include the interest on 15 days of the earlier principal
reduction amount.
 
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E

Ed Hansberry, MS-MVP/Mobile Devices

Chris Cowles said:
I believe a separately scheduled monthly principal transfer will
accomplish what you want, but I know of no way to schedule it through
the amortization program in a manner that reflects what the bank does
with the money. When the regular loan payment posts, it will calculate
the interest on the balance at that moment. The problem is the interest
should include the interest on 15 days of the earlier principal
reduction amount.
Thanks. I've been going through the math in Excel and am not sure
all of the effort is worth it. I am now leaning towards not doing
it and just paying an extra amount down towards principal once a
quarter. The biggest disadvantage that is pushing me from doing
it is the mortgage company requires a draft to do it, and I
really dislike giving anyone access to my account like that. It
isn't the deal breaker, but that, combined with the hassle in
Money and the tiny benefit over my method is probably going to
kill it for me.
--
__________________________________________________________________________________
Ed Hansberry (Please do *NOT* email me. Post here for the benefit of all)
What is on my Pocket PC? http://www.ehansberry.com/
Microsoft MVP - Mobile Devices www.pocketpc.com
What is an MVP? - http://mvp.support.microsoft.com/
 

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