Want to take years off of your mortgage payments? 

Here’s a great strategy – making bi-weekly payments.

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13 Months of Payments:

Paying your mortgage monthly means, of course, 12 payments a year. However, paying biweekly means you are paying half of your monthly payment every two weeks.  This results in 26 payments, or 13 months, of payments, hence getting one additional payment every year!

This extra payment means your principal balance is paid off at a much faster pace and you’ll pay substantially less in total interest over the course of the mortgage. 

For example, if you have a 30-year fixed loan of $250,000 at a 4% interest rate, making biweekly payments would save almost $30,000 in interest and five years off of the payment schedule!  Even if you only stayed in this home for seven years, you’d still save thousands in interest, while paying off $10,000 more of the principal balance, resulting in having more of a down payment for your next home! 

Beware of Payment Processing Companies:

Reach out to your mortgage company and inquire about biweekly payments.  Some lenders do offer it, including automatic biweekly payment plans. 

If your lender does not offer this, you may want to look into a payment processing company, however, these third-party services usually charge a one-time setup fee and may also add a small fee to each monthly payment and it may be very hard to get out of the contract with this company. Even worse, some of these services simply hold onto your second payment for two weeks and just make monthly payments on your behalf, nullifying the impact of one extra annual payment. So, if you get contacted by a company offering to save you thousands by handling your mortgage payments, be very weary!

How to Do it Yourself:

You can make this extra annual payment yourself.  Here’s how:

Take your monthly mortgage payment and divide it by 12. Make an extra principal-only payment of that amount every month. You should confirm with your lender that there are no prepayment penalties on your loan and that the extra payments will be applied entirely to your loan’s principal rather than to principal plus interest. Contacting your lender may take a little work – but it is totally worth it!

Good morning from classy and refined Paris!

Having just spent three sunny June days in Paris, I am relaxed and at peace.  Does the feng shui ever work here!  The buttery yellow buildings create a soothing backdrop for the brightly colored flowers on window sills and in lush green gardens.  The Luxembourg Gardens (as well as others) are beautifully manicured and inviting.  The statutes and extraordinary stonework apprise of the city’s abounding history of world influence, craftsmanship, and romance.

It takes only a few minutes for this American to take notice of the French’s great pride in appearance and mannerisms.  Although I am not qualified to compare world city folk, I have to say the French are among the best dressed and are very classy (American tourists be prepared to up your game).

My daughter, Alison is a fashion merchandising major (sustainability minor ) at the University of Delaware and is studying abroad in Paris this summer, including working behind the scenes at Haute Couture Fashion Week!  In addition to garden walks and cafes, these three days were spent settling Ali into her apartment and helping her learn her way around the city.  Many thanks to Lyndsey and Susanne (Ali’s lovely roommate and her very helpful mom) who are more familiar with Paris, including the best dining view of the Eiffel Tower!  Although very busy, the ambiance of the city made the three day trip feel like a vacation – a much needed one.

Until next time! Enjoy a few photos of the trip, including Ali, the Luxembourg Gardens, the Effiel Tower, and my hotel:  Hotel Observatoire Luxembourg.

Au revoir!