I was excited about a program that said that I could pay off my mortgage 10 years earlier by paying my mortgage weekly. It made sense to me, since I would pay 1/4 of my payment weekly, saving money on the interest. So I signed up for the "Preferred Payment Plan with Wells Fargo Mortgage.
Months later, as I started to look at my account, I see that Wells Fargo actually is getting 3/4 of my monthly payments without paying or deducting any interest. My payment is $3450 per month. So the program set up $875 weekly payments. As I assumed they would be deducting the $875 off of my balance weekly. Nope, wrong, they actually keep the weekly payments, without giving me any interest deductions, until they collect 4 payments and then they pay one mortgage payment. So monthly they get 3 payments of $875 or $2625 in THEIR bank without paying one dime in interest to me.
When I questioned them about that, they said actually the reason it's going to save me money on my mortgage is because I will be making one extra payment per year, so that is their scam. Because there is 12 months in a year, but that equals 48 weeks. But everyone knows their is 52 weeks, so paying weekly, I end up paying one more payment per year, which I'm ok with, to help pay off my mortgage faster.
Maybe I'm wrong, but I think the ripoff is that I'm not getting any reduction in interest for the weekly paymentsthat should be reducing my principal balance and thereby reducing mymonthly interest. Worst of all they get the money for "Free", until a whole payment is made every 4 weeks...
Now if you multiply that time a million customers, wow, they get thatmoney "free" which adds to their Port Folio and makes their bank lookgreat, without paying millions to their customers.
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