I received a letter from my mortgage company earlier in the week that contained a fascinating proposal. If I were to take my monthly mortgage payment and pay half of it every two weeks, I could pay off my mortgage six years early, and save tens of thousands of dollars in interest.

By itself, this isn’t such a bad idea. The reason it works is that by paying every two weeks, you end up making 13 full mortgage payments a year, instead of 12. This accelerates your repayment of principal.

The idiotic part is that the bank wants me to pay $295 to enroll in the program and then pay $5.42 a month in participation fees. If I were to participate until my mortgage was repaid, that would be a total of a little over $1,800.

Okay, let me understand this….. the bank is asking me to pay $1,800 for something I CAN DO MYSELF!! This is truly remarkable and (in my opinion) a completely irresponsible promotion.

If you are interested in doing something like this, it is very simple to set up, especially if you have online banking. Just set up a recurring payment of 1/2 your mortgage payment every two weeks and you are done. 30 seconds of work and you’ve saved all that interest plus $1,800. By the way, there’s nothing magical about every two weeks, either…. you can make these extra payments whenever you want. The more principal you pay early, the less interest you’ll have down the road.  To see how much you can save by prepaying, use this calculator. 

Obviously, you’ll want to make sure that there are no prepayment penalties associated with your mortgage before embarking on an early repayment program like this.

The Federal Reserve sharply cut the Fed Funds Rate by 0.75% earlier this week, leading to a corresponding decrease in the prime rate. Most credit card interest rates are tied to the prime rate, so carrying a balance on these cards just got a lot cheaper.

If you don’t have a variable rate credit card, now might be a good time to check one out.

Unlimited cell phone rate plans have arrived! Here is a recap of the major carrier options (unlimited items in parentheses), along with our comments on these new plans:

• Verizon: $99.99 (voice), $119.99 (voice + text), $139.99 (voice + text + data)
• T-Mobile: $99.99 (voice + text)
• AT&T: $99.99 (voice)

It was inevitable that unlimited would eventually happen, as per minute costs in rate plans have continued to drop and regional carriers like MetroPCS and Cricket have had some success with an unlimited product. (Those other carriers offer unlimited at lower rates of around $40 or $50, but have historically only covered a small area…so more of a landline replacement. However, they have recently started offering some pay-as-you-go roaming options, so were probably starting to encroach a bit on the customer base of the larger carriers.

Usually what happens in wireless is that by the time new products are announced, the customer benefit isn’t as great as it might first seem. That is the case here. For example, a Verizon customer could already have gotten 2,000 minutes for that same $99.99. While unlimited is obviously greater than 2,000…that current plan includes unlimited nights & weekends, as well as free calling to other Verizon customers (some 60 million or more). So, at the end of the day, for existing Verizon customers, this plan only benefits those who use more than 2,000 minutes during peak time (6AM to 9PM weekdays) calling people that aren’t other Verizon Wireless customers —– not a huge share of their customer base.

Who should look into these plans?

• People on single line plans over $99 or 2 line family plans above $198.
• People on $80 plans who sometimes incur enough overage to put them over $100, or who want more certainty with their bills

A top 10 list of Valentine-colored cell phones for 2008:

Black Cherry Chocolate (Verizon): Part phone, part music player, this slider phone has touch-sensitive navigation keys, GPS, a megapixel camera and video capture.

Dark Red Samsung Blackjack II (AT&T):   Better than the original Blackjack; full QWERTY keyboard, 2 megapixel camera, high speed data and GPS support

Extreme Pink LG Muziq (Sprint):  Music-centric phone with an MP3 player, FM transmitter, dedicated music key, megapixel camera and high speed data.

Pink LG Venus (Verizon):   A galaxy of features in a slim profile, including touch navigation, slide-out keypad and 2 megapixel camera

Pink or Red Palm Centro (Sprint):   Less expensive PDA from Palm; full QWERTY keyboard, touch screen, stereo Bluetooth and megapixel camera.

Pink Sony-Ericsson W580i (AT&T):  Sleek, slim slider music phone (both MP3 and FM), a megapixel camera and stereo Bluetooth.

Red LG Shine (AT&T):  Multimedia slider design with mirror finish & large illuminated screen, 2 megapixel camera, MP3 player and 4GB microSD memory port.

Red Samsung Juke (Verizon):  Sleek and narrow MP3 player that swivels into a phone, with GPS, Bluetooth and camera.

Ruby Red Motorola RAZR V3xx (AT&T): This version of the iconic phone offers high-speed downloads, a megapixel camera, an MP3 player and stereo Bluetooth.

Sunset Red BlackBerry Pearl (T-Mobile):  Full QWERTY keyboard in a slim, open design with a megapixel camera, voice-activated dialing and MP3 player.

Ilyce Glink, syndicated columnist of “Real Estate Matters” and best-selling author of several books for the prospective home buyer or seller has just launched a new video-centric website of Expert Real Estate Tips.   The site includes useful information for all facets of the process, including buying, financing, improving, staging and selling a home.    Check it out!

Separately, mortgage rates have dropped significantly in recent months, as the government works to ease the downturn in housing.   If you have reasonably good credit, you might be able to save tens of thousands of dollars in interest by refinancing at these new lower rates.