Biweekly mortgage payments are an easy way to speed up repayment of the principal loan balance. Making biweekly payments sounds complicated; however, it is an excellent way to build equity in your home and shorten the length of your mortgage by as much as five years. Making biweekly payments means you will make a mortgage payment every two weeks. Instead of paying the full amount of your mortgage you will pay half that amount every two weeks. If your mortgage payment is $1000 for example, you will pay $500 every two weeks. Where is the magic in that you ask? By making bi-weekly payments you pay more of the principal balance down by making 26 half payments each year. This is equivalent to making 2 extra payments during the year that will be paid directly to the principal balance of the loan. Making these extra payments speeds up repayment of the outstanding balance and reduces the amount you pay to interest. The best thing about making biweekly payments is that your total mortgage payment is easier to swallow when it is spread out over two pay periods. Establishing a routine of paying biweekly will help you get in the habit of making extra equity payments. You can even automate the process by using your banks online bill pay to schedule a payment every time your paycheck comes in. By keeping a regular routine of making biweekly payments you can easily cut 5 years repayment off your mortgage and save yourself thousands of dollars in interest payments. |
