In article <41F2E727.7080405[at]thosejohnsons.com> ,
Matthew Johnson <matt[at]thosejohnsons.com> wrote:

- quote -

The net result is the same. Just don't use a 3rd party to
do it for you--that is where the scam comes in. All you have
to do is fill in the amount on your payment stub under "additional
principal" and send the money in yourself.

There are two big scams going on in this field.

The first is that some organizations are setting up these
biweekly plans, and are charging big money to do it. I have
seen $300 membership fees and $24 a month ongoing fees. You
don't have to join any group to do a biweekly, you can do it
yourself, so these fees are a ripoff.

The second is that a big MLM organization is going around
conning people into doing a re-fi with a front load fee
and a higher interest rate in order to get on a biweekly
plan. Again, since nearly every existing mortgage allows
you to prepay additional principal each month, there is no
need to re-fi or pay higher interest rates. Again, it is
a major ripoff and a con job. Even those mortgages that
have a back end charge for early payoffs or do not allow
early payoffs nearly always allow principal prepayments on
a monthly basis without penalty.

Again, don't fall for the bi-weekly scam. It is hype
and a con job designed to steal money from you.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

pnoque <nicholashooton[at]yahoo.com> wrote:

- quote -

The question is whether the savings of $34,151 is worth it over a 30
year period. In other words, 30 years from now, the value of $34,151
will be very different than it is now for a variety of reasons. The
objective reasons are things like inflation, and investing that money
in another location with a higher rate of return (but with more
risk). But subjectively, you may be making a much higher salary then
so it might be better in terms of quality of life to have the extra
money now. I think this is a function of personal circumstance.

At low interest rates (our current climate) I feel home-based debt is
actually a good thing provided the debt is used wisely (to focus on
your passions and enjoy life) such that your overall health (in all
areas) is better.

My primary advice is to get at least one life insurance policy where
the entire loan can be paid off in case something happens to you (this
is only an issue if you have a spouse/dependent who'll want to stay in
the house and who won't be able to continue making the payments on
their own).

--Ram

John A. Weeks III wrote:
<snip> If one
- quote -


I find it easiest to just send in 1/12 extra each month to be applied to
the principal. That way, it fits in my budget.


Matt

In article <1106362907.128770.296280[at]c13g2000cwb.googlegroups.com> ,
"pnoque" <nicholashooton[at]yahoo.com> wrote:

- quote -

I stand by my statement that biweekly mortgages are a scam.
A person can get essentially the same effect by paying one
extra payment a year as prepaid principal. One can do that
with no fees, no 3-rd party company to deal with, and no
MLM companies that will raise your interest rate. If one
can do it with no hassles and no fees by writing a single
extra check a year, why would they bother with contracts,
fees, higher interest rates, and shady companies?

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

I know this is an old thread, but I hope someone stumbles across it.
I'd just like to clarify a couple of things. First of all, the
biweekly payment system, as has been said, IS beneficial for a few
reasons. Sure, the savings comes from paying off early, but it's still
savings.

The gentleman from World Savings mentioned "reamortizing" more often,
and he was refuted by the fact that you can't change the note, which
dictates a monthly reamortization. The biweekly benefits you in that,
when it does reamortize monthly, it does so on a slightly lower
principal balance, since you made an extra payment two weeks prior.
Now, given, it's not much, and you CAN simply mail in payments every
two weeks and get the same effect. I think the automatic draft is a
great idea though.

I ran the numbers just to illustrate. On a $200,000 30-year loan at
5%, you end up paying $186,511 in interest. If you take an extra
payment per year and spread it out over 12 payments, you end up paying
off in 25 years and pay $152,360 in interest. If you do it biweekly,
you pay off in 25 years and pay $152,183 in interest. So there IS a
benefit to the biweekly, be it comparatively small. So accusing the
gentleman from World of lying was quite out of line, I think.

I say if the savings outweighs the fee they charge, go for it. One
upfront fee is cool, but stay away from ongoing fees. And if sending
in payments every two weeks is your idea of hell (and you don't want to
run the risk of misapplied payments, which happens often with
self-administered biweekly systems), go with a company that has the
auto-draft.

I wrote, in part:
- quote -

I then saw what appears to be a cold call ad:
- quote -


Is this considered acceptable behavior? Or did the moderators just
misfire on this one and approve something that wasn't even a thinly
disquised ad? I'd really rather this group not be full of blatent ads,
but I don't want to critize the moderators much, they do a tough job.


======================================= MODERATOR'S COMMENT:
It's a judgement call and I agree this was marginal. Thought it would be interesting for the group to react to the post. -HWW

[[ This message was both posted and mailed: see
the "To," "Cc," and "Newsgroups" headers for details. ]]

In article <558333e1.0409261936.71e1320a[at]posting.google.com> , Loan-Star
<panderson623[at]worldsavings.com> wrote:

- quote -

Paul, I don't think that you have been reading this thread. We
just got done explaining how these Bi-Weeklies are mostly a
scam, and the "cutting off 8 years" is a fanthom savings that
actually costs people money. Then you post your "phishing"
message as if you never even read any of this.

The line that you "re-amortize your principal" is foo-foo words that
doesn't mean anything. The terms of a mortgage are written in a
document that is filed with the borrower's local goverment. No one
can change those terms. Not unless the mortgage is paid off, and
a new mortgage is issued. It sounds to me like you are using slick
advertising lingo to confuse people into thinking that you are doing
something that you have no ability to do, and that is make their
mortgage term shorter. Shame on you for lying.

I don't like it when people are trying to scam the readers here,
and I don't like postings that are all advertising and do not
contribute to the topic at hand.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

greg.hennessy[at]cox.net (Greg Hennessy) wrote in message news:<ciumbi$tbj$1[at]tantalus.no-ip.org> ...
- quote -

Hello, I noticed your message regarding a biweekly mortgage. Give me a
call. There are banks out there with Bi-Weekly programs but my
companies is the ONLY one you will find that Re-Amortizes your
principal balance every 14 days thus cutting at least 8 years off your
term. Much more beneficial than just paying the extra yourself. Give
me a call on my cell and I can explain. Well worth it.


Paul Anderson

Account Executive

World Savings Mortgage Div.

Office: 940-380-0228

Cell: 682-553-3125

Fax: 940-383-4246

In article <B6ednavGae-Vo8_cRVn-jA[at]comcast.com> ,
mandg <gscanga[at]email.uophx.edu> wrote:
- quote -

What happens is that you are making 26 payments per year, not 12. You
are essentially making an extra payment every year. That is what pays
off the mortgage early.

How are you paid? I am paid ever two weeks, and have it set up
automatically. My credit union does it for free. How much money are
these offers asking for? If more than 50 bucks I'd say forget it, and
just mail in the payment yourself.

In article <B6ednavGae-Vo8_cRVn-jA[at]comcast.com> , mandg
<gscanga[at]email.uophx.edu> wrote:

- quote -

Bi-Weekly mortgage programs are largely a scam. There are two
reasons why I say this:

1) they charge a big fee to get started, and often have an on-going
fee. If you have a loan that does not have a pre-payment penalty,
you can pre-pay it youself without paying the bi-weekly fees. The
bi-weekly plan is simply stealing money from you.

2) the savings are illusionary. The reason you loan pays off early
is that you are borrowing the money for a shorter period of time,
so you are paying less accumulated interest. If you really intended
to pay off your loan early, you could have simply gotten a loan with
a shorter time period, and that would have carried a lower interest
rate, which really would have saved you money.

The way that a bi-weekly works is that you make 26 payments that
are half the normal size each year. This is the same as 13 payments
that are the full size. Normally, you would have only paid 12 full
payments in a year. As a result, you can get essentially the same
effect by making one additional payment each year as a pre-paid
principal. This will reduce your loan term just like a bi-weekly,
but with no additional fees.

While it might look tempting to pay off your home a few years early,
you should ask if it really makes sense. A home loan is usually
cheap money, especially if you get the mortgage interest tax break.
You have to make a pretty good rate of return elsewhere on your
money to be a better investment.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

If they are going to charge you for it, don't use it. Just send in an
additional principle payment.

The trick is that you make 26 payments, which equals 13 months and that goes
directly to principle.

If you are going to be moving in a short time, it may be a better return to
save that extra money. That way you have it to make a better down payment.
An exception could be if you didn't put down 20% originally and got stuck
with mortgage insurance, then improving the percentage of equity could save
you that money that's going for nothing really.


"mandg" <gscanga[at]email.uophx.edu> wrote in message
news:B6ednavGae-Vo8_cRVn-jA[at]comcast.com...
- quote -

I get a steady stream of offers from my mortgage lender to set up a payment
plan where I remit half of my monthly payment every two weeks (essentially
sending the same monthly amount but just in two payments). The evidence
supports that this will reduce the term of my 30 year note by 25%:

http://mortgage-x.com/library/biweekly.asp

But my concern is, like most homeowners today, I don't plan on staying here
30 years (I've lived here for 2 years now and plan on moving on within the
next 5 years). Would this payment plan still make much sense then?

Thanks in advance.