Should i pay biweekly on my mortgage

The bi-monthly mortgage can be something to watch out for because it is not the same as the bi-weekly mortgage. A bi-monthly mortgage does not have the same results as a bi-weekly one because the homeowner pays half of the monthly mortgage twice instead of every two weeks.

This means an extra payment is not made. If you have built up sizeable savings then applying a portion of your savings to your mortgage will permanently lower your interest cost by lowering the principal balance you are charged interest on. The following table highlights local rate information. If the lender does not offer a bi-weekly program and the homeowner is interested in paying the loan off early, a bank account can be opened and arrangements made for the mortgage payment to come out every month in two bi-weekly payments.

At the end of the year, the homeowner can write a check on the account for an amount that is the same as the monthly payment and sent into the lender. There is also another simple method that is used for prepaying a mortgage. There are what is called intermediary companies that can set up bi-weekly mortgage payments for the homeowner. These intermediary companies will charge a fee to make that extra payment and the fee can be rather large.

But depending on how your biweekly payments are handled, they may not help you make the dent in principal you intend. There are 52 weeks in a year, so this works out to 26 biweekly payments — or, in effect, 13 monthly payments. Some mortgage lenders offer biweekly payment options. For example, Navy Federal Credit Union offers a dedicated program for those who want to make payments every two weeks indefinitely, says Kevin Torres, a mortgage product strategist at the credit union. It also has a free Budget Easy program that lets you make those biweekly payments automatically if you want or switch back to monthly payments if your finances change.

Some also charge monthly fees, and it may be hard to get out of the contract once it begins. Even worse, some of these services simply hold onto your second payment for two weeks and just make monthly payments on your behalf, nullifying the impact of one extra annual payment. So if you get contacted by a company offering to save you thousands by handling your mortgage payments, tread carefully.

Take your monthly mortgage payment and divide it by By making biweekly mortgage payments, you can reduce your overall mortgage interest paid. Not only that, but you can pay off your home loan earlier than scheduled, eliminating that monthly mortgage payment and freeing up your budget even faster.

What could you do with those kinds of savings? For other articles like this one, check out our free personal finance resource center for more information. Home Buying 6-minute read August 13, Mortgage insurance can be good in that it allows you to buy a home without a large down payment, but no one likes paying it. Learn how to kick it to the curb. Home Buying 9-minute read March 18, Thinking about buying your first home? Learn about the common mistakes first-time home buyers make and how you can avoid them.

Home Buying 9-minute read August 13, Are you considering a refinance? You can get a real, customizable mortgage solution based on your unique financial situation. Apply Online. Making Biweekly Mortgage Payments There are some lenders that allow you to automate biweekly payments.

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