HousingWire recently reported on a national company under scrutiny - and paying the price - for allegedly deceptive marketing tactics. The investigation and resulting lawsuit centers around biweekly mortgage payment services. This is something we've covered in the past.Read More
The AmeriFirst Home Buyer Learning Center
The typical arrangement for mortgage holders is for them to pay it off with monthly payments adding up to 12 payments in a year. There is an option though and it is splitting monthly payments into bi-weekly payments. This kind of arrangement is known as a bi-weekly mortgage and it has some benefits. The main advantage is that such an arrangement can save you thousands of dollars by cutting off years off your loan duration.
Any time a person sets a standard mortgage plan, he/she makes a single monthly payment and a total of twelve payments in a year. With a bi-weekly mortgage payment, however one makes payment equal to a half of the standard payment e very two weeks. This is equivalent to 26 half payments in a year. A bi-weekly mortgage payment allows a person to make an extra full payment each year, this takes a full month off the payment schedule each year he/she uses the bi-weekly mortgage payment.
There are several different options to pay off a mortgage more quickly. Bi-weekly mortgage payments can be made or extra principal can be added to the normal monthly mortgage payment.
Many homeowners consider switching to bi-weekly mortgage payments schedule at some point. They perceive that these payments carry some magic with them that lowers the interest expense. We do not want to discourage you but let's face it: The only magic is that of equal 13 monthly payments annually.
A house is one of the best and also most costly personal assets one can acquire. It is therefore only prudent to do everything possible to reduce mortgage costs. One of the best ways to do this is with bi-weekly mortgage payments.
Bi-weekly mortgage payments have become a favored strategy by many homeowners looking to shorten the length of their contract obligation and save some money while doing so. The process is a fairly simple one. Rather than making a single monthly mortgage payment, as is most typical, one arranges with their mortgage lender (a rare occurence with most lenders) to make a one-half payment every two weeks instead.