Bi-weekly
mortgages are sometimes a popular choice when interest rates are
excessively
high because it is just common sense that the less interest
you pay the more will be applied
to you principal. And they serve their purpose in that respect. But
what is a bi-weekly mortgage anyway? Well in a nut shell you make 26
payments instead of twelve monthly
ones in a years time. Doing this enables you the mortgagor to pay more
on the principal
of your loan.
Monthly payments have been the norm extensively throughout many
families as their
desired choice to pay for their home. However even if rates are low
many homeowners
now choose this type of mortgage over others just to save precious
dollars that could be used elsewhere. Traditionally monthly payments
are applied to PI, which is the interest plus the principal. I am sure
you are getting the idea that you can significantly pay your loan off
quickly with the right interest rate when you have bi-weekly payments.
Using this approach when paying off you mortgage can greatly take a
bite out of the amount of the interest
portion of your loan and shave off some mortgage payment time.
In just a common month, the payments could pay off your accrued monthly
interest
depending on your rate. Finding the perfect interest rate for financial
requirements can be
a good investment in time well spent. Better your time than your
pocketbook. There are bi-weekly mortgage calculators that can show you
the the just how much the savings can
ad up to. However if this is something you would rather not undertake
yourself you could contact a broker.
With the mortgage payments being made twice rather than monthly you
will have made
one extra payment each year. This does require due diligence in your
resolve to pay this added principal but you incentive is in knowing
that you have reduced your principal for
that year. Nice bonus! Do you realize that this reduction in your
principal will allow your mortgage to amortize a bit more quickly,
which saves your hard earned cash.
A mortgage broker can offer you a bi-weekly payment plan so you can
take advantage
of the savings in repaying your loan. Many families have found this way
the one that works for them, given the stability for managing the
budget. Does this sound like type of mortgage payments that you are
disciplined enough to commit to over the long haul possibly enabling an
earlier retirement or some extra cash in your pocket.
So if you have decided on a bi-weekly mortgage payment plan to pay for
your home or some other option I wish you well and happy hunting. And
if this is not for you perhaps a
blanket
mortgage will keep you toasty for years to come.
