Bi-weekly payments can greatly reduce the time it takes to pay off a thirty year mortgage. By making twenty six payments a year, borrowers make one additional payment each year. This extra payment can accelerate the loan repayment and potentially save an individual thousands of dollars in finance charges.
Some mortgage companies and banks will charge their customers to set up a bi-weekly payment plan but most do not. Borrowers can contact their lender to verify if any additional charges apply. If a mortgage company charges an additional fee for bi-weekly payments, a borrower may be able to submit an extra payment a year at no charge. The check for the extra payment should state that, "this payment should be applied to the principal". If the check does not state that the payment should be applied to the principal, than the mortgage company is likely to apply it to the interest and the borrower would forgo the benefit of the additional payment. Again, borrowers should contact their lender to verify if any additional charges apply for an additional annual principal payment. If you're either in the process of refinancing or obtaining a home loan for a purchase, you may want to inquire with your lender about additional fees that may apply to bi-weekly mortgage payments. Make sure you receive any information in writing for future reference. This information does not constitute financial, investment or tax advice.
WEEKLY
This information is for general informational purposes only and does not attempt to give advice to your specific circumstances. You are advised to discuss your specific situation with an independent financial adviser before making any decisions.
Bi-Weekly Mortgage Payments WEEKLY
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