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From: marks@yogi.DEC
Newsgroups: net.consumers
Subject: Semi-monthly mortgage repayments
Message-ID: <1389@decwrl.UUCP>
Date: Tue, 12-Nov-85 09:02:42 EST
Article-I.D.: decwrl.1389
Posted: Tue Nov 12 09:02:42 1985
Date-Received: Thu, 14-Nov-85 20:34:12 EST
Sender: daemon@decwrl.UUCP
Organization: Digital Equipment Corporation
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I have recently read about a new type of real estate mortgage agreement,
in which the bank gives the buyer a mortgage at the normal insterest
rate for, say, a 30-year, fixed-rate mortgage, but allows the mortgagor
to pay off the loan semi-monthly rather than once a month.  The total
monthly payments are the same, they are just split in half and paid
twice a month.

The incredible part of this is that you manage to reduce your interest
so much by paying the loan semi-monthly, that you end up paying only a
fraction of the total interest you would otherwise have paid, while
expending the same amount of money per month, and you pay off what would
have been a 30 year mortgage in something like 12 years.

Clearly, this system benefits the consumer greatly, but banks are not
exactly rushing to sign people up under this system.  The only advantage
I can see from the bank's point of view is that the bank has the loan
repaid in a much shorter period of time than it otherwise would.  Of course,
it is losing lots of interest money on the deal.

My question is this:  does anyone know of any banks that are doing this?
I live in the Boston area, but the closest bank I have found that does 
this type of mortgage is the Hudson City National Bank in Chatham, N.Y.
(upstate).  Seems like a great deal to me.  Wonder how the banks could
be convinced.

R.M.