One way to make your mortgage payment is to wait for the payment coupon to show up and mail it back. You can still do that if you want, but there are a variety of other options to fit an on-the-go lifestyle.
Here at Quicken Loans, we have several different ways you can pay your mortgage so you can pick the one that works best for you. And the best part: It’s all totally free.
One Time Payment
When it comes time to make your payments, you can use Rocket Mortgage in order to make your mortgage payment.
Monthly Auto Pay
You can also use Rocket Mortgage to set up auto draft.
Although many people may have it set up so that the payment comes directly out of their bank account through the bank’s online payment system, it may be better to set up automatic payments directly with your lender. Why?
Mortgage payments sometimes change. The amount necessary for taxes and insurance may go up or down every year. The same is true if you’re in an adjustable rate at the end of its fixed period. By setting up an automatic payment through us as opposed to the bank, you can make sure the payment isn’t too low and that you’re not overpaying when your escrow or rate goes down.
You may know you can save on interest by paying a little bit extra toward your mortgage payment every month and telling your lender to put it toward principal. What can be hard is establishing the routine. There is an easier way.
Quicken Loans clients can now set up biweekly payments through Rocket Mortgage for free. This means that instead of making 12 monthly payments, you’re making half your mortgage payment every two weeks. You can set it up here. We apply these payments to your loan on a monthly basis.
The first benefit is that your payment becomes more manageable when it’s cut in half. Also, there are 52 weeks in a year. This comes out to 26 half payments or 13 full monthly payments per year.
With only 12 months per year, where does all that extra money go? It gets applied directly to your principal.
For example, on a $200,000, 30-year mortgage with a 4% interest rate, the monthly payment is $954.83. If you just made the monthly payment, you would pay $143,738.99 in interest over the life of the loan.
Now let’s take a look at the effect of the extra monthly payment under the biweekly payments option. By putting one extra monthly payment per year directly toward the principal, you save $23,046.60. Also, you cut more than four years off the term. To try out your own scenario, check out our amortization calculator.
On The Go
Let’s face it. We’re not always near a computer. We lead busy lives taking kids to afterschool activities or heading to dinner with friends. If you find that you forget to sit down and make your mortgage payment, you should be able to do it on your phone.
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