KyCardinalFan wrote:The bank with whom we have our mortgae sends us an offer occasionally that takes our mortgage payment, divides it in half and allows us to make payments twice a month rather than at the first of the month. It's supposed to reduce the length of our loan by a few years but our monthly paymnets are the same.
Is this the same as what Leroy is doing by paying $45 later in the month? Is the first payment going to interest and the second going to principal?
I've been tempted to sign up, but I always intend to research it fully. Trying to figure out what's in it for them, us and where's the catch. Invariably though, the offer expires before I remember to do so. We intend for this to be our final house so we'll be keeping it for the life of the loan.
They may be talking about a bi-weekly plan, which times your half-payments along with your bi-weekly payday schedule. What ends up happening then is every 6 months or so, you make an additional half-payment that you wouldn't have made otherwise. Over the year, you end up making the equivalent of 13 full payments instead of 12.
This is a handy idea if you don't have the discipline to do it yourself. You could just pay 1/12 of your mortgage payment extra each month, and effectively do the same thing. Or make an extra full payment when you get a Christmas bonus, or tax return. It boils down to being a money-maker for the bank, because they charge you something silly (I think mine is $250) just to sign up for the bi-weekly plan.
KyCardinalFan wrote:The bank with whom we have our mortgae sends us an offer occasionally that takes our mortgage payment, divides it in half and allows us to make payments twice a month rather than at the first of the month. It's supposed to reduce the length of our loan by a few years but our monthly paymnets are the same.
Is this the same as what Leroy is doing by paying $45 later in the month? Is the first payment going to interest and the second going to principal?
I've been tempted to sign up, but I always intend to research it fully. Trying to figure out what's in it for them, us and where's the catch. Invariably though, the offer expires before I remember to do so. We intend for this to be our final house so we'll be keeping it for the life of the loan.
They may be talking about a bi-weekly plan, which times your half-payments along with your bi-weekly payday schedule. What ends up happening then is every 6 months or so, you make an additional half-payment that you wouldn't have made otherwise. Over the year, you end up making the equivalent of 13 full payments instead of 12.
This is a handy idea if you don't have the discipline to do it yourself. You could just pay 1/12 of your mortgage payment extra each month, and effectively do the same thing. Or make an extra full payment when you get a Christmas bonus, or tax return. It boils down to being a money-maker for the bank, because they charge you something silly (I think mine is $250) just to sign up for the bi-weekly plan.
I see. That makes sense, because then I would be making 26 bi-weekly payments rather than 12 monthly.
Now that you mention it, there may have been fees for signing up. I believe that may have been why I tossed it this last time. I do recall, now, turning the letter over and reading the greyed fine print - which is a rant in itself.
AWvsCBsteeeerike3 wrote:Has anybody read the book Rich Dad, Poor Dad or any financial planning book that deals with cash flow and money management?
No i think ive heard of it though, its amazing how long you can get by if your able to have cash flow even if your not making any money. To a point cash flow is more important then making money, at least short term.
That's the gist of the book. Well, a large portion of it.
