Does A Bi Weekly Mortgage Payment Really Save You Money

Dated: 01/29/2018

Views: 47

Answer: Yes. It does.

BUT

There is a better way.

Make Extra Payments to Principal on your Own.

Paying monthly adds up to 12 payments per year. But bi-weekly half payments add up to 13 full payments per year (because there are 52 weeks in a year, not 48). And that 13th payment goes entirely to principal, shaving 4 to 5 years off a 30 year mortgage. But you can do better by dividing your monthly payment by 12 and adding that amount to your monthly payment. You achieve the same result but with some added benefits.

1. You won't be locked into a contract, so you can skip an extra payment if you have to. You are in control!

2. You won't be paying extra administration fees that eat away at your savings (third party service providers, other than your mortgage provider charge these)

3. Some service providers won't post that extra to principal until the end of the year. Doing it yourself will apply the extra to principal immediately chiseling away at your balance as you go and paying off your mortgage an extra month or two sooner than by allowing the bank to hold onto your extra principal and posting it at annually. Cottonwood Heights

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Michael Barth

Michael Barth is a full-time Associate Broker/Realtor with an extensive knowledge of the communities along the Wasatch Front. As the former owner of Sundays Child and Kona Ice he brings over 20 years ....

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