bi weekly mortgage payment

From: "J.D. Baldwin" <baldwin@netcom.com>
Subject: bi weekly mortgage payment
Date: Sun, 6 Dec 1998 05:46:29 -0800 (PST)

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"Mark" wrote:
> I've recently been told (and it should have been obvious) that if
> you pay your mortgage off in a biweekly manner instead of with
> monthly payments, you can save yourself a significant amount of
> interest.  Since my paychecks do me little good in my checking
> account, when I buy a house I'd like to be able to pay back the loan
> in biweekly payments.

Others have pointed out that this is a SCAM by the mortgage companies.
Yes, it's a "win" to pay your mortgage this way, but the benefit is
not, in general, worth the fees they charge to set it up.  Judging
from the offers North American Mortgage Co. sent me, it's nowhere NEAR
cost-effective to take them up on it.  I would wager that none of the
companies offering this "service" have actually made it a good deal
for the consumer.  If someone out there has a counter-example, 
please share.

There are other considerations, too.  If you set yourself up for
bi-weekly payments, you increase the risk that a payment might get
lost, either because you slip up, or because the post office does.
That incurs you a hefty late fee, and it would only take one such
occurrence to negate all "benefit" of this scheme for a year or so.
If you want to get really anal about it, add in the cost of postage,
accounting time, etc.

Others have said it but it's worth repeating:  just pay $100 (or
whatever) extra principal every month.  This is *always* a win, and
a pretty big one.  Unless, of course, you were foolish enough to
sign on to a mortgage with a pre-payment penalty.
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