Paying your mortgage in bi-weekly payments can save you thousands of dollars in interest and cut years off your mortgage loan. You may see offers from your lender to start a bi-weekly repayment plan for you; they offer to do this for a one time fee of as much as $400. Don’t waste your money with such offers.
You can easily start your own bi-weekly mortgage plan without paying a fee. In order to do this you need to read the fine print on your mortgage loan agreement. Some lenders make it difficult to realize savings from a bi-weekly payment plan. It is not in a mortgage lender’s best interest to save you money this way. The way they do this is by posting payments to your account once a month. By doing this the lender is preventing you from saving any interest on your mortgage; this is the main reason for starting a bi-weekly repayment plan in the first place.
If your mortgage lender posts payments to your account in this manner, call them and ask to have this changed. If the lender is unwilling to do this refinance with a lender that will.
Here is how bi-weekly mortgage payments work. When you start a bi-weekly repayment you pay half of your monthly mortgage payment every two weeks. Making bi-weekly payments results in 26 half mortgage payments every year; this is the same as making 13 monthly mortgage payments every year. This extra payment over the term of your mortgage shortens the time it will take you to pay off the mortgage loan. A side benefit of this extra payment is you will pay less interest over the life of your mortgage loan.
You can learn more about saving money on your home mortgage loan by registering for my free Underground Mortgage Refinancing Videos.