Problem setting up bi-weekly mortgage payment schedule for every other Monday

cwclifford

I have a problem where when I set up bi-weekly mortgage payments and set the Next Payment to a specific date, the date changes to a few days before or later than expected or several weeks later and on another day of the week instead of Mondays. Why won't my settings stay intact? (NOTE: my dates are in DD/MM/YYYY format)

See here where I have both "Payment Schedule" and "Frequency" set to "Every Other Week" in the Loan Details settings, and the "Next Payment" starting on 3/4/2019: 

Then, see that the next payment due date is 3/2/2019 and the scheduled transactions start on 3/18/2019. At least, 3/18/2019 is on the right cadence being on a Monday but why not start on 3/4/2019 when I wanted?



I went back to the Loan Settings screen and the Next Payment date is now set to 3/30/2019! Arbitrarily setting the date to 2/30/2019 now has the Next Payment Due on 3/2/2019 and the scheduled transaction starting date on 3/7/2019. 

Basically, I can't get the schedule to follow what's inputted on the settings screen. What's going on here?

NotACPA

@cwclifford  Let's go back a step and examine this.  Is your mortgage lender ACTUALLY posting to your account 2x per month ... so that your principal amount decreases with each payment?

I suspect that they're not.  That they're just sitting on the money, and they're collecting interest on the money, until the 2nd payment comes in ... and then they're posting both amounts as one.

This benefits them ... but not you.

You'd be better of putting the 1st payment into a Savings account, or a money market fund, and then paying on-time, all at once.

cwclifford

Thanks @NotACPA, I'll check with them on how they are handling the application of the payment. But, it still stands that I want the transaction to be scheduled when the mortgage company draws it from my bank. I can work out how to handle the splits based on what the bank says. 

cwclifford

I was on the phone for almost two hours with Quicken tech support and got nothing resolved. It was decided that you just have to go off the scheduled payment and check to make sure the splits are correct when the payment posts. 

NotACPA

@cwclifford  Let's go back a step and examine this.  Is your mortgage lender ACTUALLY posting to your account 2x per month ... so that your principal amount decreases with each payment?

I suspect that they're not.  That they're just sitting on the money, and they're collecting interest on the money, until the 2nd payment comes in ... and then they're posting both amounts as one.

This benefits them ... but not you.

You'd be better of putting the 1st payment into a Savings account, or a money market fund, and then paying on-time, all at once.

cwclifford

Thanks @NotACPA, I'll check with them on how they are handling the application of the payment. But, it still stands that I want the transaction to be scheduled when the mortgage company draws it from my bank. I can work out how to handle the splits based on what the bank says. 

cwclifford

@NotACPA You were correct that they hold the payments until the second one comes in! I was told by one rep that each payment applied immediately so I expected the principle reduction to occur bi-weekly.  Holding half the payment in savings makes sense but this setup helps me stay honest and organized.
 
The problem now is that I'll have bi-weekly transactions posting in the register but the actual mortgage payment (with accurate PITI) will be applied every four weeks. Now, how do I manage reconciling the scheduled bi-weekly payments with the monthly payment? Do I have to do it all manually using splits on the bi-weekly payments? 

NotACPA

" but the actual mortgage payment (with accurate PITI) will be applied every four weeks. "

HUH? Why is the payment only being posted every 4 weeks ... and not monthly? And, when  they do that, is the "as-of" date of the payment being backdated?

cwclifford

I called again today to confirm and was told the payment does indeed post the day the second payment is received. However, the payment is not backdated so interest will accrue until 3/18 (almost $900!) and I calculated that I'll have 17 total extra days of interest due to the schedule below.

Scheduled: Mar 4, 2019
Scheduled: Mar 18, 2019 - payment posts
Scheduled: Apr 1, 2019
Scheduled: Apr 15, 2019 - payment posts
Scheduled: Apr 29, 2019 - payment posts (all principle)
Scheduled: May 13, 2019
Scheduled: May 27, 2019 - payment posts
Scheduled: Jun 10, 2019
Scheduled: Jun 24, 2019 - payment posts
Scheduled: Jul 8, 2019
Scheduled: Jul 22, 2019 - payment posts
Scheduled: Aug 5, 2019
Scheduled: Aug 19, 2019 - payment posts
Scheduled: Sep 2, 2019
Scheduled: Sep 16, 2019 - payment posts
Scheduled: Sep 30, 2019 - payment posts (all principle)
Scheduled: Oct 14, 2019
Scheduled: Oct 28, 2019 - payment posts
Scheduled: Nov 11, 2019
Scheduled: Nov 25, 2019 - payment posts
Scheduled: Dec 9, 2019
Scheduled: Dec 23, 2019 - payment posts

This makes this whole thing a losing deal so I canceled! Even the person I spoke with told me this was not the way to go. I know I'd be saving on interest with the extra principle payments but this is something I could manage myself. I like the idea of the savings account to hold the portion of the payment so I'll be going that route.

Thanks!

NotACPA

I'm a former System Audit VP for a bank ... so I know how these "schemes" work.

I have heard that SOME (but I can't remember which) banks actually post each payment as received ... thus benefiting the user.  But most don't, which is why I asked.

cwclifford

Ha, I actually referred to it as a "scheme" when I talked with the mortgage co. rep and she didn't disagree. It allows you to be disciplined but at a cost. Thanks again!