An addenum to Kelby's mortgage post

Most of my readers probably see Kelby's blog, if not, they should check it out. This post is, well, an addenum to his most recent post, which can be found here. www.westtexasconservative.blogspot.com

One thing that should be pointed out, is that with this scenario, which is the best way to go, there will be 2 months out of the year where you actually make 3 payments instead of 2. For example on the 3rd, 17th, and 31st of a given month. Those 2 extra payments are what builds a very large chunk of that extra equity, as they should be roughly 100% principle and no interest. This usually isn't an issue, since you will also get paid 3 times a month for 2 months out of the year if you are paid every 2 weeks. If these two month don't coincide, make sure you keep that extra money aside when you have to make 3 mortgage payments in one month.

You also have to make sure your lender doesn't put this extra cash in some sort of holding account, which they sometimes do. They sometimes will not apply it to your principle unless specifically instructed to do so, so when they get that extra payment twice a year, they put it into this other account and it just sits there, which doesn't help you out much at all. The program Kelby is speaking of may do this for you automatically , I am not sure.

C