I plan to begin making semimonthly mortgage payments and am hoping someone out there has figured out how to properly set up quicken to make semimonthly mortgage payments. I haven't found any way to do this in an 'automated' fashion so the appropriate principle pay down occurs (or, even, how to change the mortgage payment to semimonthly since this also drives automated payments through checkfree).
Any input or thoughts appreciated, Bennie Gibson
I may be assuming incorrectly, but isn't your mortgage company charging you a fee to make that extra mortgage payment? Even so, why not just pay more principle with your monthly payment and save the hassle and possible expense of making more than one payment per month? Further, I don't believe Quicken has the capability to set up loan payments with more than one per month. You'd need to do this manually by scheduling that extra payment. And then the mortgage tracking the the loan module would be incorrect....
Anway, my 2 cents.
Regards,
Margaret
Bennie Gibs> I plan to begin making semimonthly mortgage payments and am hoping
Actually Quicken does have semi-monthly loan payments available in the Loan Wizard ... which is why I didn't really understand the op's problem.
Hmmm, I've looked all over in the loans module and help, and although I can find info on how to make an extra payment, I can't find info on how to change the payment frequency to semi-monthly. Is this something you have to set up when you initially create the loan and can't change it later?
Regards,
Margaret
John Pollard wrote:
John - thanks - I'll take a look at the loan wizard. Had not run it - had just tried updating existing loan. Also, Margaret - I'm a credit union customer and do not THINK they charge for the extra payment but will check - thanks for the heads up.
Thanks for both replies, Bennie
When you have an existing loan selected in the Loan Wizard, click Edit Loan on the Loan Summary tab: there is a drop down for Payment Period/Standard Period.
Ah, found it, good to know. :-)
Regards,
Margaret
John Pollard wrote:
Whether or not your credit union charges for additional payments, I also agree with Margaret: just add additional principal to each mortgage payment instead of converting to a bi-monthly schedule. The rule of thumb I've seen on it is to divide your monthly payment by 12 and pay that much as additional principal every month (i.e., if your payment is $1,200/month, pay $1,300/month by adding $100 to your principal payment). That should work out to about the same as either a bi-monthly or a 15-year mortgage. Plus, you have additional flexibility since you can skip the additional principal for a month or so if money gets tight. Just make sure you specifically earmark the additional money as going towards the principal.
Bennie Gibs> John - thanks - I'll take a look at the loan wizard. Had not run it -
You will need to check the terms of your mortgage. Most US mortgages accrue interest on a monthly basis, so making a payment twice a month is no different than making one payment. You will also need to make sure your mortgage processor handles any overage the way you intend. Frequently, any funds over the minimum payment are credited to an escrow account for paying insurance & taxes, and not considered a principle paydown, usless you explicity tell them - a bit more difficult with an electronic payment.
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