![]() ![]() If you choose to add extra principal to your required payments, you may have to check with your mortgage holder to find out if anything is required so that the extra money goes directly to principal instead of simply prepaying required payments. However, verify with your bank first that this will still satisfy your payment terms and not cause a prepayment penalty or other problems. The end result will be the same, but you won't have the ease of automation you might desire. You'll need to call and ask because they typically don't advertise this feature.Īlternatively, you can simply split your own mortgage payment in half, and pay that amount every two weeks. Many banks and mortgage companies will allow you to reconfigure your existing mortgage into a biweekly payment plan. ![]() Once you've determined biweekly payments (and/or extra payments) are right for you, it's time to set it up and start saving! Before accelerating your mortgage consider competing investment alternatives for building equity. Have you checked other investment options? You should always invest your money in whatever provides the highest after tax return.Similarly, if you are paid monthly then it is usually easier to stick with a monthly payment period and just add extra principal to accelerate your payoff. It is easier to match your largest expense (mortgage payment) to your income when the payment period matches your pay period. Are you paid enough every two weeks? Bi-weekly mortgage payments work best when you are paid every other week and your income is high enough to support the payment.Please consult with a qualified financial professional if this is your situation. It also involves estate planning, asset protection, and much more than can be covered in this brief article. There are tax considerations on both sides of the savings equation. Are you nearing your retirement? Using your retirement savings to accelerate your mortgage payoff involves complicated analysis to determine what is best.Bi-weekly payments have a bigger impact when you stick with it long enough to make a difference. Do you plan to stay in your house long enough? If you plan to stay in your house for a short time, like 5 to 7 years, then you might be better off focusing your money in some other investment.Here are the important points to consider: Are Bi-Weekly Payments Right For You?īefore you start bi-weekly payments make sure it is a good fit for your situation. This requires little sacrifice, but reaps huge savings as you can see when you input your mortgage payment information into this Bi-Weekly Mortgage Calculator. The end result of paying every two weeks is you'll be paying more every year, regardless of whether or not you make extra principal payments in addition to your biweekly payment. Related: Here’s a scientific system to build your wealth now The net effect is similar to one extra monthly payment (13) per year. With a bi-weekly payment you'll be be making 26 payments instead of 12 – albeit smaller payments. This bi-weekly pattern is distinct from a bimonthly mortgage payment which may or may not involve extra payments. Instead of making one payment every month, you'll be making a payment every other week. Making biweekly mortgage payments is a strategy that can help you save a lot of money in interest and pay off your mortgage early. Here's everything you need to know to get started. You can make biweekly payments instead of monthly payments, and you can make additional principal payments to see how that also accelerates your payoff.Įach of these payment alternatives will take you closer to being debt free. It will figure your interest savings and payoff period for a variety of payment scenarios. This Bi-Weekly Mortgage Calculator makes the math easy. Thankfully, you can significantly reduce your debt without feeling pinched by making biweekly mortgage payments. Not sure where you will find the extra funds to make it happen? How Much Can You Save By Making Bi-Weekly Mortgage Payments?ĭo you want to pay off your mortgage early? ![]()
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