Want to figure amortization using 2 things...

[connie254]

HOW?

I have a biweekly mortgage, and I have mortgage amount plus $80 taken out. This is a cushion in case property taxes or insurance goes up so I don't have to fiddle with monthly amount. And twice a year I have an extra half payment added in. So how can I figure out what to put in the amortization calculator to figure out when it will be paid off? Assuming the taxes and insurance stays the same(I know it wpn't but one less calculation to figure).

 

[RitaE]

When you figure your mortgage pay-off escrow items (taxes, insurance and that extra cushion you are trying to build) do not alter the payoff of the mortgage. You want to look only at your amount that is being applied to the debt and put that in as your payment.

So what you need to know is

Mortgage Balance
Debt Payment (and then you can compute a half payment)
Interest Rate

What months you make those extra payments will alter your results some but not drastically. Some people do it every 6 months, some get paid higher amounts during different times of the year and do it then .... but it won't make a huge difference to play around with the timing.

If you web search "bi-weekly mortgage with extra payments calculator" you should find several online tools that can do the calculation for you.

 

[Weluvdisny]

I'm confused about the $80 extra payment. It either will be applied toward principal, which doesn't help your escrow balance for taxes. Or it gets added to your escrow balance, and working for a bank, we are not allowed to hold over a certain percentage over what the actual taxes are, in a customer's account. Your amoritization schedule should be based on principal and interest payment only, not escrow. If you add escrow, it will calculate it as if you are putting your escrow payment on principal and it your payoff date will be much sooner than you think.

 

[connie254]

The extra 80 is added to the principal. But once a year, the monthly mortgage gets readjusted for increase/decrease in taxes/insurance so that 80 is there so I have a cushion on that potentially increased amount and so I don't have to readjust the monthly amount, and so the principal gets a slight chunk knocked off it each month.

For example, just to say the mortgage due is 900 PITI. I pay 490 every two weeks. Next year taxes go up slightly and 920 is what is due, so I still pay 980, but only 60 gets added to the principal. Another year, the insurance drops and 910 is now due. I don't readjust my budget, and 70 gets added to the principal. The mortgage company understands it. Those aren't my numbers just trying to make it make more sense.

 

[Anthony1971]

It is simple look up the formula for an annuity due... with that said it is long but that is what it is.
You do have a few problems however A bi-weekly mortgage is in general done by an outside firm that charges a fee look closely at your agreement.
you need to take an paymnets for escrow -- taxes insurance etc.
or you can do it the simple way and call you bank or the agent who is handeling the biweekly payements and they can tell you... if you use the bank make sure you find out and deduct the biweekly fee.

 

[Weluvdisny]

The extra 80 is added to the principal. But once a year, the monthly mortgage gets readjusted for increase/decrease in taxes/insurance so that 80 is there so I have a cushion on that potentially increased amount and so I don't have to readjust the monthly amount, and so the principal gets a slight chunk knocked off it each month.

For example, just to say the mortgage due is 900 PITI. I pay 490 every two weeks. Next year taxes go up slightly and 920 is what is due, so I still pay 980, but only 60 gets added to the principal. Another year, the insurance drops and 910 is now due. I don't readjust my budget, and 70 gets added to the principal. The mortgage company understands it. Those aren't my numbers just trying to make it make more sense.

Ok, I understand now. The amoritization schedule would have to be based on just your p&i without the extra $ added because it varies every year. If you print it out, then as you make the bi-weekly payment, reduce the balance on your own so you can keep track.