Bi-Weekly Mortgage vs Standard Mortgage
Okay, so you've heard a lot of buzz lately about the purported advantages of Bi-Weekly Mortgage Payments - paying your home mortgage every two weeks instead of the traditional monthly time frame. Buzz is one thing. Facts are another.
So what are the facts exactly? As a homeowner, are there truly any advantages for me to switch my mortgage payments to a bi-weekly mortgage payment schedule?
Think of a bi-weekly mortgage payment as an accelerated mortgage payment system. It's an effective way to help pay down your home mortgage faster over time. But don't confuse it with a bi-monthly mortgage payment. A bi-monthly mortgage payment simply takes your existing monthly payment amount and splits it into two equal payments each month.
Advantages of Bi-Weekly Mortgage Payment vs Standard Mortgage Payment
- Decreases the amount of your outstanding loan principal more quickly
- Automates and simplifies your mortgage payment process
- Saves you money over the long term
- Helps to increase your home equity faster
Some banking institutions will require you to set-up a bi-weekly mortgage payment system through a 3rd party company which acts as a go-between for you and your lender. Unfortunately, these 3rd party bi-weekly payment companies can often charge unnecessary fees and set-up charges. To avoid these added expenses, simply create your own Zero-Cost Bi-Weekly Mortgage Payment System.
Zero-Cost Bi-Weekly Mortgage Payment System
Take your normal monthly mortgage payment amount and divide it by 12. Simply add that amount to your normal monthly payment and send in your increased payment to your bank or lender. You basically accomplish the exact same results without having to pay a 3rd party. And, your extra payment amount goes toward paying down the loan principal each month, instead of just once a year.
Creating your own zero-cost bi-weekly mortgage takes some added discipline on your part, but is an easy, cost-effective method for reducing loan principal and length.
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