The Bi-Weekly Mortgage - Who Needs It?
Have you received an advertisement offering to save you thousands of dollars on your thirty-year mortgage and cut years off your payments? With email "spam" becoming more pervasive as everyone tries to "get rich quick" on the internet, these ads are popping up with troublesome regularity.
The ads promote the "Bi-Weekly Mortgage" and for the most part, do not come from a mortgage lender. Exclamation points punctuate practically every claim:
- No closing costs!
- No refinancing!
- No points!
- No credit check!
- No appraisal!
- Save thousands!
- Cut years off your mortgage!
To achieve these wonderful savings all you have to do is allow half of your mortgage payment to be deducted from your checking account every two weeks. It’s easy. Of course, there is a small "set-up fee" and usually a "transaction fee" with every automatic deduction.
Essentially, the ads are truthful in almost every respect.
They just want to charge you money for something you can do on your own for free.
Normally, you make twelve mortgage payments a year. Since there are fifty-two weeks in a year, a bi-weekly mortgage equals 26 half-payments a year. The equivalent would be making thirteen mortgage payments a year instead of twelve. By applying that extra payment directly to the loan balance as a principal reduction, your loan amortizes more quickly, requiring fewer payments.
You save money. The ads are true.
You cannot simply mail in half a payment every two weeks to your mortgage lender. Since they do not accept partial payments for legal and accounting reasons, the mortgage company would just mail your half-payment back to you.
Instead, the bi-weekly mortgage company is an intermediary between you and your mortgage lender. They automatically debit your checking account every two weeks for half of your mortgage payment, then place your funds into a trust account. Basically, this is just a holding account for your money. In another two weeks, there is another automatic deduction from your checking account, and so on. When your mortgage payment is due, your funds are withdrawn from the trust account and forwarded to your mortgage lender.
Since you are placing funds into the trust account faster than your mortgage payments are due, you eventually accumulate enough money to make an "extra" payment. The way the cycle works, this occurs once a year. The extra payment is applied directly to your principal balance, which causes your loan to amortize faster, pay off more quickly and save you thousands of dollars.
Potential Problems with the Trust Account
Because your funds are held in the trust account until your mortgage payment is due, there are potential dangers. Not only are your funds held in this account, but so are the funds of everyone else enrolled in the bi-weekly program. That is a lot of money.
Most likely, there will be no problems.
However, if there are accounting errors, mismanagement, or even fraud, your mortgage payment might not get made. The first hint of a problem will probably be a phone call or letter from your mortgage lender, but not until after your payment is already late. Since responsibility for making the payment rests with you and not the bi-weekly payment company, you may find yourself digging into your personal savings to make the payment directly -- even though the bi-weekly payment company has already collected your funds.
Later you can work out the trust account problem with your bi-weekly payment company.
The Cost of the Bi-Weekly Mortgage
There is usually a set-up fee that runs between $195 and $350, depending on how much sales commission is paid to the individual or company setting up the account for you. You also pay a transaction fee each time there is an automatic deduction from your checking account and sometimes also when the payment is made to your mortgage lender. There may also be a periodic "maintenance fee."
Meanwhile, whoever controls the trust account is earning interest on your money.
Savings of the Bi-Weekly Mortgage
By making principal reductions using the bi-weekly mortgage program, your mortgage will amortize more quickly, saving you money. How quickly your loan pays off depends on your interest rate and when you begin making the bi-weekly payments.
On a $100,000 loan at today’s interest rate of eight percent, your first principal reduction would probably be a year from now. Assuming the principal reduction is equal to one monthly payment ($733.76), you would save $43,852 over the life of the loan and pay it off almost seven years early.
However, you have to deduct from those savings any amounts you paid in set-up, transaction, and maintenance fees.
No-Cost Alternatives to the Bi-Weekly Mortgage
Instead of hiring a company to manage your bi-weekly payment, you could accomplish essentially the same thing on your own for free. Just take your monthly payment, divide it by twelve, and add that amount to your monthly mortgage payment. Be sure to earmark it as a principal reduction.
The first way you save is that you do not have to pay any fees to anyone. It’s free.
In addition to not paying fees -- using the same example as above -- your total savings on the mortgage would be $45,904. Plus the loan would be paid off three months quicker than with the bi-weekly mortgage. The reason you save more is because you are making a principal reduction each month, instead of waiting for funds to accumulate so that you can make one principal reduction a year.
The bi-weekly mortgage companies claim that homeowners are not disciplined enough to follow through with principal reduction plans on their own. They suggest the reason for setting up the bi-weekly mortgage enforces discipline upon you, and by doing so, they save you money.
However, in this internet age, banking on line and automatic deductions are readily available. You can set up your own automatic deductions including the additional principal reduction and have it go directly to your mortgage lender. Since the deduction occurs automatically, just like with the bi-weekly mortgages, self-discipline is not a problem. Once again, you don’t have to pay anyone to do it for you and you save even more money.
The bi-weekly mortgage plans do not really do anything except move your money around and charge you for it. Plus, even though the danger is negligible, you must trust someone else to hold your money for you. If you can do the very same thing for free, plus save yourself even more money by doing it on your own, why pay someone else?
The bi-weekly mortgage plan – who needs it?
If your goal is principal reduction and saving money, then it is a good plan. If you do it on your own instead of paying someone else to do it for you, then it is a great plan.
copyright HomeLoanABC, RealEstateABC 2000
Equity Express
Established in 1994, Equity Express is a nationwide wholesale biweekly servicing company to the mortgage originations industry. Our services are utilized by mortgage professionals for the purpose of saving their clients Tens of Thousands of dollars in mortgage interest expense and to reduce the overall term of the loan. The principals of Equity Express offer over 20 years of mortgage banking experience and fully understand the ever changing climate of the mortgage originations industry.
Equity Express currently services clients of the following lending institutions as well as many more.
- ABN Amro Mortgage
- Aurora Loan Services
- Bank of America Mortgage
- Citimortgage
- Citifinancial
- Countrywide Home Loans
- Chase Manhattan Mortgage
- Ditech /GMAC Mortgage
- Everbank Mortgage
- Homecomings Financial
- HSBC Mortgage
- Hudson City Savings Bank
- Litton Loan Servicing
- Mortgage America, Inc.
- National City Mortgage
- Regions Bank
- Sovereign Bank
- US Bank Home Mortgage
- Washington Mutual Mortgage
- Wells Fargo Home Mortgage
Biweekly Mortgages Plans As Seen on TV
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Call 803-250-1042 and find out the names
of the largest lenders in the U.S. who were each sued
$100,000,000 a piece for not crediting
extra payments to principal correctly!
The Bi-weekly Mortgages Association
How BWMA Plans Compare
with Biweekly Mortgage Programs
Equity In 5 Years
Competitors figures are low because they show only part of the picture, principal reduction equity.
BWMA members have 300% more equity because they combine all three equities together to show the entire picture, i.e. down payment equity, appreciation equity and principal reduction equity.
Do you want only part of the picture or the whole picture?
Equity In 10 Years
After 10 Years with a BWMA Preferred Bi-weekly Mortgage Plan you have enough Equity to put your children through College, buy a dream home or Retire early.
Semi-monthly Debiting
Prefer semi-monthly or monthly Payments over Bi-Weekly?
Not a Problem with BWMA Consultants. They do it all!
Competitors have no such options.
Increases Selling Price
Competitors only allow you to transfer the program to your next mortgage note.
BWMA lets you transfer the Preferred Biweekly Plan to the next buyer.
Give your Buyers one more good reason to want your home, i.e. Home For Sale $150,000, ask about our Special $63,000 savings.
For Mortgage Brokers
Mortgage Broker -- Learn how to easily add $300-$1,000 in commissions to each loan you close and stop missing out on the Thousands dollars in extra income you could be taking home!
...And all while saving your mortgage clients $60,000-$100,000 in unnecessary mortgage interest payments and cutting up to 9 years in payments off their 30 year mortgage with America's largest managed biweekly payment plan!
And because most homeowners never stick to a biweekly plan on their own, you can feel great ensuring your clients save so much of their hard earned money...Best of all, most of the work is done for you so you can focus on servicing your clients and growing your business...
My name is E. Tamika Edmond and I have a question for you; Are you aware that thousands of mortgage brokers just like you easily add from $300-$1,000 in commissions to most of the loans they close and that you too can do this easily and feel great about it?
Let me explain:
As you may or may not know, homeowners can save Thousands of dollars by using a mortgage biweekly payment plan to payoff their 30 year mortgage in as little as 21 years, cutting off up to 9 years of unnecessary mortgage interest payments.
What you may not know is that as a mortgage broker you can easily earn Thousands of dollars by helping to ensure your clients are protected and guided with a properly managed biweekly program when they decide to employ one to save on their mortgage.
I can almost hear you asking yourself: "why would I want to charge my customer for something they can do on their own, for free?"
And yes, some financial advisors will tell homeowners that there are different ways to manage their mortgage, which will accomplish slightly better results, or to focus their financial energies elsewhere.
But, there is just one major problem with that; Unfortunately, most people never hold themselves accountable long enough to get any real results in any endeavor. Even their finances!
And there is one major reason for this:
It is a simple matter of discipline. You see, up until now, you may have told your customer to send in half their mortgage payment every 2 weeks, and that doing this will result in saving Thousands of dollars off their mortgage. But did you really think they actually do this on a consistent enough basis to get any real results? Answer is "NOT VERY LIKELY!"
In fact, it is a proven fact that only 3% of homeowners that eagerly start a biweekly mortgage payment plan ever stick to it with enough discipline to achieve the desired results. That's just 3 homeowners out of 100! Sound familiar? Well that figure pretty much applies to humanity in general and anything most people set out to achieve.
So now that you know why a managed biweekly payment plan is necessary, let me tell you 5 simple reasons why you as well as your clients will benefit most when you offer US Mortgage Reduction's (USMR) Equity Acceleration Program (EAP) as an easy add-on service to your client's mortgages:
Reason #1: You will bring home an extra $300-$1000 in commissions to each loan you add the EAP to! When you spend a few minutes to show your clients how much you will save them when they add the EAP program to their mortgage, and that they will not have to pay anything for it up front (more on this below), your EAP income will be the easiest commissions you'll ever make!
In fact, with the EAP you keep a whooping 70% of the fee amount you charge your clients, every single time. This is the highest % paid in the industry!
Here's how it works:
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You use the simple EAP calculator to show your client they will (for example) save $70,000 with the EAP and they decide to enroll.
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You now decide how much the fee will be from this enrollment (a set fee of $99, $300, etc.) or, do what the most successful EAP mortgage brokers do and make the fee 1% of that amount you are saving them. In this case $700 which is 1% of $70,000.
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You then submit to USMR a couple of easy to complete forms. USMR then receives a check for the fee amount from the title company and cuts you a check for $490, or 70% of the $700!
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You put on a big smile and happily deposit the extra income in your bank account!
The more EAP clients you enroll, the more checks you receive. Simple as that!
You'll kick yourself for not offering this great service sooner.. and you should know that at this very moment, there are thousands of home business owners and entrepreneurs in the US that make a full time living signing up the very mortgage clients you and other mortgage brokers let slip away without enrolling in the EAP!
Now, these business owners are NOT mortgage brokers! They are just average people who believe in the EAP and think it is a great service to offer and now sell it for a living. Like any business, they spend money advertising, marketing and their time to succeed with the EAP.
But here's the cool thing about that; You ARE a mortgage broker! The person that the exact EAP target market that is already making so many non-mortgage brokers so wealthy, has already sitting right in front of, literally!
Bottom line is it should be YOU who capitalizes on this opportunity to add $1,000's to your commissions and no one else!
And not only that, but lets face it, every major mortgage company has its own biweekly plan that it will sell to your client as soon as your client becomes their client.
So... do you want the extra $300-$1,000 per loan for yourself or would you rather leave it for other business owners, Wells Fargo, Washington Mutual, Chase Manhattan, Bank of America and the like?
Great answer! Click Here to get started right away!
Reason #2: Although you get paid your EAP fee right away, you never have to charge your clients for it up front! You will be pleased to know that you will never have to deal with collecting your EAP enrollment fees from your clients.
In fact, your clients will never have to pay anything up front since the EAP enrollment fee you decide to charge them, is automatically added to the balance of their loan!
You'll find it of great convenience that all you'll need to do is submit a simple form along to your title company and that's it!
As I mentioned above, the title company then sends USMR a check for the EAP fee amount you choose and twice a month, USMR will mail you a check for 70% of your EAP enrollment fees. Simple and easy!
Reason #3: With the EAP your clients are protected against careless lender overcharges, creating customer loyalty, referrals and repeat business! Did you know that according to U.S. Government statistics, homeowners are being overcharged Billions of dollars each year due to lender miscalculations! Did your lender partners tell you that?
The EAP system has many "Checks and Balances" in place to make certain that your client's accelerated mortgage plan is well protected. USMR has enven been referred to as the mortgage biweekly industry "watchdog."
With the EAP, your clients can request a FREE mortgage audit every year once they have participated in the Equity Acceleration Program for a minimum of twelve consecutive months.
And this audit is not a little amortization schedule that you get with a $25 software program. This is a detailed mortgage audit that would cost hundreds of dollars if homeowners went to a C.P.A. or an accounting firm and is valued at $195. The cost to your clients on the USMR Equity Acceleration Program... nothing!
Can you see how just this added bonus will further establish YOU as not just a mortgage broker with your clients, but someone who (on top of already saving them Thousands of dollars with the EAP) truly cares about their financial health and wellbeing?
Believe me, when people realize that you are on their side financially, you stop being just the mortgage broker they go to and refer their friends to, you're family!
Reason #4: FREE Training and Full-Time Support. When you sign up to offer the EAP, you don't just receive a box full of forms and instructions, you get a full-time staff of EAP professionals that is available to is to you absolutely free of charge, 45 hours per week, Monday - Friday.
This is Your own staff of EAP professionals that will give you any training assistance you require, help you with client enrollments and always there to help you grow your EAP income!
Reason #5: Multiply your EAP income when your friends and mortgage colleagues sign up to offer the EAP! No, this isn't "MLM" or Multi Level Marketing, so don't worry.
You see, when you start making Thousands in extra income with the EAP, you will naturally want to tell your colleagues about the EAP. USMR realizes this and knows that it is only fair that you are rightfully compensated when someone signs up to offer the EAP because you referred them.
This is why USMR will pay you another 10% from the amount of each EAP enrollment fee charged by anyone you refer to the EAP... and another 10% of EAP sales generated by those referred to the EAP by your direct referrals!
So, you get to collect commissions from any direct referrals and their direct referrals. It stops there because the 2 level referral income system is meant to do what is right and reward you for any new EAP representative that signs up. This assures that the EAP stays away from being any type of "MLM" or similar business scheme.
Look, don't get this wrong, you will never be asked to "recruit" other brokers to sell the EAP. But, the way USMR sees it, once you are earning a large income with the EAP, you will naturally want to tell other mortgage brokers about the program. It is only right that you are rewarded for your kind recommendation.
More reasons? Are there tons of other reasons why you should offer this great service to your mortgage clients? You bet. But I feel that the 5 reasons listed above are enough for you to intelligently evaluate this opportunity and decide if this is something you want to offer.
I hope and believe that I have done my part showing you why no mortgage broker should go without offering this much needed service. I encourage you to sign up now so you can start growing your income with the EAP right away!
Your welcome EAP kit will arrive at your office via UPS in 5-7 days and you can get started leveraging your commissions immediately.
If you have any questions before signing up, please feel free to contact me on my cell at 803-394-0824.Consultant Opportunities with
The Biweekly Mortgage Association (BWMA)
The Biweekly Mortgage Association ~ The most competitive mortgage reduction company, both for the homeowner and for the consultant. Sign up homeowners for nothing out of their pocket, you still make your full (up to 100%) commission. Offering you 3+ (multiple) streams of income including up-front commissions and residual “walk-away” income.
BWMA, focuses on what makes money for you, the mortgage reduction consultant, not what makes money for the parent company who develops and sells software and marketing materials. Member Associates offer our Preferred Bi-weekly Loan Service for Home, Auto, Commercial and other loans.
By maintaining its autonomy, the Biweekly Mortgage Association derives its sole support from member contributions, not sales from software or homeowner debit fees. By doing so, the association is a non-partial entity focusing on what makes money for you, the mortgage reduction consultant, not what makes money for a "sales kit company"!
The Biweekly Mortgage Association has the options so no Consultant who wants to work is left behind!
$$$Looking for Top Producer$$$
Dear Fellow Professional,
Here is the opportunity for mortgage brokers, loan
officers, realtors and financial advisors to really help
their clients to home ownership. Equity Express is the
only a
bi-weekly mortgage program that is an EXCLUSIVE partner
with CALYX. We help homeowners in all 50 states build
equity and payoff their mortgages early. As a Wholesale
Representative I am currently looking for people in the
above-mentioned occupations that want to really
supplement their current income. All of you have clients
that will benefit from this product and I have the
software and products for FREE. Who else can claim
partnership with Calyx so don't be fooled. If you
want the best bi-weekly program give me a call or email
me. For every person you can help they have at least 5
family members or friends you can also help. Just think
we are all winners!!
If you want to become a TOP PRODUCER this is the time
to take advantage of the bi-weekly mortgage and watch
you income soar.
Contact Tamika @ 803-394-0824.