Anyways, I though you were talking about mortgages from these custom bike builders that have a sky is the limit pricing chart.

I was being called daily by Citimortgage (my mortgage company as well – recently closed on an apt) to enroll in the biweekly. I couldn’t find any information about it on their website (although I didn’t spend much time looking) and instead googled and found this website.

So… thanks for your insight on Citimortgage’s “advantage” plan – i know now that i should not spend another second worrying about it.

Thanks for the link. For your information I finished editing your interview this morning and I hope to have it up the first week of July.

I’ve actually trying to build up a full week of interviews for that time. Hopefully it all works out.

CD

Being the one who promted the pay-down vs. invest debate, I’d like to
comment on what I finally decided to do.

After reading all the excellent posts here, and after discussing the
matter further with my financial advisor I decided to leave the money
exactly where it is in the CDs. The CDs are getting between them an
average of 5.25% APY. With my mortgage interest at 5.375% effectively
being closer to 4.0% thanks to itemizing on my Federal Income Taxes,
I’m actually making ~1.25% APY on this money, which is a whole lot
better than *losing* .0125% as I previously thought.

The reason for *not* just paying it down is primarily that there’s no
point. It’s only going to save me 10 years and $3000. I’ve already
made more than $3000 just from the interest earned on these CDs.

The CDs are FDIC insured, so it’s as “safe” a bet for an investment as
there is. And, if I ever run into an emergency such as being
unemployed, that money will take care of my monthly mortgage payments
for a couple of years.

Additionally, I’m working on building up an emergency fund to cover
the bulk of our other expenses modulo the mortgage payment.

So, thanks so much for the great comments and insights you all
presented here. They were quite informative and educational!

I just checked on my mortgage company’s website (CitiMortgage) to see
what they’re rules concerning bi-weekly payments were. I wasn’t
impressed.

First, they have a “plan” called the “BiWeekly Advantage” plan. To
sign up for this plan, they *require* you to allow them to
automatically draft from a checking or savings account. That’s not
something I’m likely to let them do

Second, and this is the part that *really* frosts me, is that they
*charge* you a $375, non-refundable enrollment fee!

You are probably much better off just sending them a check every two
weeks with a note telling them, in no uncertain terms, how much to put
towards principal, interest, taxes, and escrow. At least where I
live, they *have* to abide by your wishes, and here it’s against the
law to charge pre-payment penalties.

While I truly love the idea of paying bi-weekly, I don’t think
enrolling in the “BiWeekly Advantage” plan is an advantage to anyone
but them!

My intent is not to rehash the pay down vs. invest debate, but this is not a foregone conclusion. Which way the actual math goes is dependant on a number of variables, and does not support one conclusion over the other with any regularity.

FT

The easiest thing to do to get pretty much the same result is to make an extra 1/12th of a payment each month (automated, of course) – even the about.com article on bi-weekly mortgages suggests this. It’s a small enough amount each month that you learn to live without it, but it still saves you a lot in interest and helps you build equity a lot faster.