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Q: My mortgage lender is trying to get me to do the twice a month payment instead of one monthly payment. According to the sheet, I'll be saving big buck. Has anybody had experience with this type of mortgage payment? Does it work out the way they say?

A: I recently looked into this. For a bit under $400 our mortgage holder will convert our existing loan to one of a few programs (bi-weekly or semi-monthly [ 14 or 15 days ]). It will save big bucks over time, assuming you stay at the same house for a long time. Still, the cost to convert over will be made up in a short period, but you typically put out at least one extra mortgage payment each year. Had you invested that into a basic equity instrument, you'd make MORE on it than in your low interest loan in terms of savings. Do the math and figure out what's best for you. You should be able to find a web site with a mortgage (amortization) calculator that should help you decide. If your mortgage holder doesn't have a prepayment penalty, just take 1/12th of a mortgage payment and add it to your current payment every month, and tell 'em it's to pay down the principal. (That's important, because they won't apply it that way unless you tell them to.) You'll save yourself the "conversion" fee and not be locked in. This way if you hit a rough patch and can't make the biweekly or semi-monthly payments, you're not in hot water with your lender. .

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