Comments on: Don’t Waste Your Time and Money on “Bi-Weekly” Mortage Payments

By: Will

Will — Sat, 18 Feb 2012 23:03:22 +0000

I just recently signed up for GMAC’s “Semi-Monthly Mortgage Payment Program,” which directly deducts my mortgage payment twice a month from my checking account. This service does not cost any additional fees. However, despite the fact that GMAC withdraws my funds twice a month (1st & 30th), they only apply the payment once a month (on the 15th), so I don’t benefit from having my payment applied to the balance twice a month, which would dramatically reduce the principle over time by slowing the compounding of interest (saving me money and taking money from GMAC). In addition, the amount that I added to my bi-monthly payment to pay additional principal is not added to the account for yet another month after they receive it! GMAC is clearly screwing its customers by holding their money while the interest on their account compounds, which equates to more fees for them.

By: M Emming

M Emming — Wed, 01 Feb 2012 02:12:29 +0000

The really “great” thing about GMAC is if you make that bi-weekly payment directly to them through your checking account – they won’t apply the payment to your principle – instead, they apply it to your next payment due. After doing this for 5 years, to I just realized that I don’t owe a payment until next year. And to get it fixed, is a nightmare. NEVER again will I use GMAC mortgage. The person I spoke with didn’t have a good grasp of the english language and kept repeating the same words that appeared on her screen – she had no idea what I was trying, very patiently to her.

By: Jack Sweeney

Jack Sweeney — Tue, 23 Aug 2011 21:11:30 +0000

I stumbled upon a site called Half A Payment (halfapayment.com) they charge a small fee that is not even charged up-front but rather taken from the additional payment. I think I agree with Dawn, I can’t imagine myself putting money aside and sending it once a year, for a 1 time small fee that I won’t even feel i rather just sign up, but before I do any thoughts?

By: Dawn

Dawn — Tue, 22 Mar 2011 14:46:10 +0000

I’ve known that’s how biweekly programs work but I signed up for one because I just wasn’t paying the extra on my own. Plus, having half the amount I’m used to, coming out every time I’m paid, is a lot easier to manage financially that adding extra to an already high mortgage payment. I dunno, after talking with friends and trying to do it myself, paying a small amount of money to have it done for me just seems to work better.

Also, in your article you said “If you have a monthly payment of $1200, not counting any applicable escrow, add $1200 to your December mortgage payment” but that won’t save you the 23 years and 25% of interest that these programs advertise. The trick is to make an additional payment INCLUSIVE of the amount that would go to escrow. So if P&I is $1200, but PITI is $1500, to get the same savings you’d have to pay an extra $1500/year, whether you do it annually, monthly, or biweekly. Just thought I’d clear that up.

By: ELLA WEISS

ELLA WEISS — Sat, 05 Jun 2010 17:15:07 +0000

Thank you so much for breaking the bi-weekly process down so anyone can understand it. I will take your advise and pay a payment at end of year and save all those hidden cost. Blessings to you and your family. Thanks again, Ella