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Path: utzoo!linus!philabs!cmcl2!seismo!hao!noao!terak!suze
From: suze@terak.UUCP (Suzanne Barnett)
Newsgroups: net.consumers
Subject: Re: Semi-monthly mortgage repayments
Message-ID: <875@terak.UUCP>
Date: Thu, 14-Nov-85 11:29:14 EST
Article-I.D.: terak.875
Posted: Thu Nov 14 11:29:14 1985
Date-Received: Sun, 17-Nov-85 07:22:19 EST
References: <1389@decwrl.UUCP>
Organization: Calcomp Display Products Division, Scottsdale, AZ, USA
Lines: 26

> 
> I have recently read about a new type of real estate mortgage agreement,
> in which the bank gives the buyer a mortgage at the normal insterest
> rate for, say, a 30-year, fixed-rate mortgage, but allows the mortgagor
> to pay off the loan semi-monthly rather than once a month.  The total
> monthly payments are the same, they are just split in half and paid
> twice a month.
> 
What I have heard is that the payments are bi-weekly, not
semi-monthly, which means you pay approximately 13 months
worth of mortgage payments each year. For example, if your
payment is $1000 per month, and you pay $500 every two weeks,
you pay a total of $13000 in the year, not $12000.

Yes, this pays your interest faster, but, you could pay off the
loan even sooner if you have that extra $1000 applied directly to
the principal, not the interest first, as are most mortgage payments.
-- 
**************************************************************
Suzanne Barnett-Scott

uucp:	 ...{decvax,ihnp4,noao,savax,seismo}!terak!suze
phone:	 (602) 998-4800
us mail: CalComp/Sanders Display Products Division
	 (Formerly Terak Corporation)
	 14151 N 76th street, Scottsdale, AZ 85260