http://blogs.reuters.com/felix-salmon/2012/01/05/bank-charge-of-the-day-mortgage-payment-edition/
t makes sense, for lots of reasons, to make your mortgage payment on the day you get paid. Most salaried Americans, however, get paid every two weeks. Which means, to all intents and purposes, that you need to be able to make one mortgage payments out of every two paychecks. And that in turn raises an intriguing possibility: if you take half of your mortgage payment out of every paycheck, you’re going to end up making 13 mortgage payments a year. Which will pay down your mortgage faster, and could save you thousands of dollars.
Enter the ever-helpful Citibank, with a product which does just that. It’s called The BiWeekly Advantage Plan®, and it’s essentially an automated mortgage payment, of half your monthly mortgage payment, which comes out of your account every two weeks. Easy. There’s even a Savings Calculator to see how much less money you might be able to end up paying.
And then, of course, there’s this:
There is a one-time non-refundable enrollment fee of $375 and a transaction fee of $1.50 for each draft.
That’s an up-front fee of $375, plus another $39 a year, just for the privilege of making your mortgage payments every two weeks rather than every month.
And it turns out that simply setting up Citi’s own online banking to make the same payments would not do the same thing after all. The reason is that CitiMortgage has a rule that it will only accept a full payment once per month. If you want to pay every two weeks, well, you can’t.
Which helps to reveal another fact: it turns out that Citi is making significantly more than $375 plus $39 per year for this service. Here’s the FAQ:
Payments are remitted to your mortgage company monthly.
The payments are made in arrears, of course. You make your half-payment, and then wait two weeks, and you make your second half-payment, and then the two are bundled up and sent off to the mortgage company (which in nearly all cases is CitiMortgage itself) as a single monthly payment.
Which means that for roughly half the year, Citibank is sitting on an amount of money equal to half your mortgage payment. That money has left your account: it’s not yours any more, and Citi can do with it as it pleases. And Citi gets the float from all that money until it gets around to sending it off to pay off the mortgage.
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Response by lobster
almost 14 years ago
Posts: 1147
Member since: May 2009
It's an interesting article, but I think that people get paid alot of different ways. Some people get monthly draws from their business so they are paid only once a month. Other people work for themselves and get paid as the funds are received from clients. However, all the fees for this Citi plan are distressing and could be easily overlooked. Good that you pointed it out for us.
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Response by buster2056
almost 14 years ago
Posts: 866
Member since: Sep 2007
That's nice that Citi charges you a transaction fee for giving them an interest-free loan.
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Response by Riversider
almost 14 years ago
Posts: 13572
Member since: Apr 2009
I think the guy who invented the citi program is the same guy tht sells efax for $8 a month to people who refuse to use the free software that does the same thing..
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Response by jacobst
almost 14 years ago
Posts: 7
Member since: Nov 2008
riversider- trying to find free software similar to efax. can you please help me? thnaks .
Flmaoz. You do know there are carbureted cars that sell for $200k?, you do know some of my crew have aol email accounts. You do know landlines still exist. You do know some ppl think their coop on Riverside will never go down in price, right?
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Response by Socialist
almost 14 years ago
Posts: 2261
Member since: Feb 2010
I have a GREAT idea on how to reduce the federal deficit: THe federal govt. can CHARGE people to pay their taxes! It's a brilliant idea. The govt. can charge people an enrollment feee and a monthly fee to pay their taxes.
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Response by Riversider
almost 14 years ago
Posts: 13572
Member since: Apr 2009
They already do that. We're forced to pay an estimate of our taxes as the year progresses instead of being able to write a check for the full amount due on April 15th, so essentially we're giving the government an interest free loan.
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Response by columbiacounty
almost 14 years ago
Posts: 12708
Member since: Jan 2009
how do you figure that? does the government not pay out expenses throughout the year?
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Response by jordyn
almost 14 years ago
Posts: 820
Member since: Dec 2007
"We're forced to pay an estimate of our taxes as the year progresses instead of being able to write a check for the full amount due on April 15th, so essentially we're giving the government an interest free loan."
You're making the fault assumption that taxes are owed at the end of the year rather than when the income is earned. I'm not sure why you believe that to be the case, but the fact that the estimated payments exist demonstrate you're wrong. For most people, the right amount (or more) of taxes are withheld with each paycheck and sent to the government by the employer.
People who get refunds are, in fact, giving an interest-free loan from the government; everyone else is getting a free ride to some extent because they pay later than when the income is earned.
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Response by huntersburg
almost 14 years ago
Posts: 11329
Member since: Nov 2010
>columbiacounty
about 3 hours ago
how do you figure that? does the government not pay out expenses throughout the year?
You and Riversider deserve each other. One of you is no less a moron than the other.
The government's payment schedule on expenses has absolutely nothing to do with when it's revenue is due.
jordyn has it correct.
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Response by NYCMatt
almost 14 years ago
Posts: 7523
Member since: May 2009
Taxes on a man's labor are unconstitutional.
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Response by huntersburg
almost 14 years ago
Posts: 11329
Member since: Nov 2010
>Taxes on a man's labor are unconstitutional.
Bring out the inflatable rat. Matt and his cronies are going to protest the government.
The NLRB is part of the government. Ooops. What to do?, what to do?
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Response by Boss_Tweed
almost 14 years ago
Posts: 287
Member since: Jul 2009
>Taxes on a man's labor are unconstitutional.
So ... taxes on a woman's labor are OK?
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Response by NYCMatt
almost 14 years ago
Posts: 7523
Member since: May 2009
Yes, because it's non-essential labor.
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Response by Sunday
almost 14 years ago
Posts: 1607
Member since: Sep 2009
Even if one can agree on that statement, there's the question of how to define "man" and "woman."
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Response by falcogold1
almost 14 years ago
Posts: 4159
Member since: Sep 2008
Daddy's the one with the package
Mommy looks more like a mailbox
Defined...
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Response by Sunday
almost 14 years ago
Posts: 1607
Member since: Sep 2009
There are multiple types of mailboxes that accept packages of various size and shapes. By all definition of "man" and "woman", they both have at least a couple of mailboxes and packages each.
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It's an interesting article, but I think that people get paid alot of different ways. Some people get monthly draws from their business so they are paid only once a month. Other people work for themselves and get paid as the funds are received from clients. However, all the fees for this Citi plan are distressing and could be easily overlooked. Good that you pointed it out for us.
That's nice that Citi charges you a transaction fee for giving them an interest-free loan.
I think the guy who invented the citi program is the same guy tht sells efax for $8 a month to people who refuse to use the free software that does the same thing..
riversider- trying to find free software similar to efax. can you please help me? thnaks .
http://brontecapital.blogspot.com/2011/09/electronic-fax-really-doing-time-warp.html
Flmaoz. You do know there are carbureted cars that sell for $200k?, you do know some of my crew have aol email accounts. You do know landlines still exist. You do know some ppl think their coop on Riverside will never go down in price, right?
I have a GREAT idea on how to reduce the federal deficit: THe federal govt. can CHARGE people to pay their taxes! It's a brilliant idea. The govt. can charge people an enrollment feee and a monthly fee to pay their taxes.
They already do that. We're forced to pay an estimate of our taxes as the year progresses instead of being able to write a check for the full amount due on April 15th, so essentially we're giving the government an interest free loan.
how do you figure that? does the government not pay out expenses throughout the year?
"We're forced to pay an estimate of our taxes as the year progresses instead of being able to write a check for the full amount due on April 15th, so essentially we're giving the government an interest free loan."
You're making the fault assumption that taxes are owed at the end of the year rather than when the income is earned. I'm not sure why you believe that to be the case, but the fact that the estimated payments exist demonstrate you're wrong. For most people, the right amount (or more) of taxes are withheld with each paycheck and sent to the government by the employer.
People who get refunds are, in fact, giving an interest-free loan from the government; everyone else is getting a free ride to some extent because they pay later than when the income is earned.
>columbiacounty
about 3 hours ago
how do you figure that? does the government not pay out expenses throughout the year?
You and Riversider deserve each other. One of you is no less a moron than the other.
The government's payment schedule on expenses has absolutely nothing to do with when it's revenue is due.
jordyn has it correct.
Taxes on a man's labor are unconstitutional.
>Taxes on a man's labor are unconstitutional.
Bring out the inflatable rat. Matt and his cronies are going to protest the government.
The NLRB is part of the government. Ooops. What to do?, what to do?
>Taxes on a man's labor are unconstitutional.
So ... taxes on a woman's labor are OK?
Yes, because it's non-essential labor.
Even if one can agree on that statement, there's the question of how to define "man" and "woman."
Daddy's the one with the package
Mommy looks more like a mailbox
Defined...
There are multiple types of mailboxes that accept packages of various size and shapes. By all definition of "man" and "woman", they both have at least a couple of mailboxes and packages each.