If you are in good standing on your Mortgage payments, many banks will put you on Bi-Saver payments which means that you pay one half of your monthly mortgage payment every two weeks. By doing this, you will actually make 26 half payments (13 mortgage payments) in a year. The 13th and 26th one half payments go completely to the principal. You can save many thousands in interest and several years.
You must make all payments on time (we used direct debit from our checking account every other Wednesday. If you don't, they put you back on regular monthly payments. We recently paid off our mortgage which was originally due to paid in 2018 and we saved many thousands in interest. There was a $300 charge to set up the payment schedule contract.
If you can't get the Bi-Saver (or a similar plan), you can still send extra with your monthly payment (in most cases a minimum of $25) and designate it for "principal only". We had begun doing this until we learned of the Bi-Saver. I always wrote a second check for the $25 and wrote "apply only to principal" in the memo line along with our loan number. Depending on the amount, you can save a good amount this way too, yet are not bound to a contract.
By Mary from Gold Hill, NC
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Why would anyone pay $300 to set this up? The easiest way to pay off your mortgage is just sending extra payments when you can. Also, if you get a tax refund every year, send that in also.
I do something similar to this without going through the bank or paying any type of fee.
I keep an envelope in the box where all my incoming bills are kept (mine is a desktop type file box). Every week I write a check for 1/4 of the mortgage payment and put it in this envelope. At the end of the month I send in all 4 checks. The mortgage company doesn't care that it's in 4 checks as long as it adds up to at least the amount due!
I do the same thing with my car payment too. I've been doing this for many years and never had a creditor complain yet.
Just be sure to keep track of all payments and their labels. More than once I had the mortgage company apply my extra principal to interest. Catch their mistakes monthly! Otherwise, the mort. co. might tell you that it's been 3 months and they can't do anything about it. This would occur frequently when my mortgage co. would change and the new co. would invariably credit the wrong type of extra payment in SPITE of my filling out the submission form correctly.
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