Question: well I don’t need to write you a formula to see how 52 payments will save > lots of money interest over 13 payments even if their totals at the end of > the year are the same, (and about this 13 payments, won’t you have to double > up one month or do you mean every 4 weeks???) especially when you’re talking > about 100,000 dollars but if thats what you want i have no problem doing it, > especially if you take into account when the payee has the money in their > accounts (every two weeks for most salaried people)
Answer: I’ve been following this thread and noticed nobody seemed to have read their mortgage agreement. Most mortgage companies and banks credit your mortgage payment(s) just once per period. So if you send in two or more payments during the cycle, they are not posted to your account until your cycle date. There is no advantage to sending multiple checks. Sending a little extra with your one payment and marking it as a principal payment is the way to go. Even though a mortgage seems to be a compound interest loan, it really is a simple interest monthly loan. That is, you borrow the outstanding principal for one month at a time. Your payment covers the interest for the month just ended and a little bit of the principal. The quicker you reduce the principal, the less interest each month and more of each payment going towards principal payback.
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