How do accelerated bi-weekly mortgage payments work and how can they help pay my mortgage off quicker?
If you’re looking for ways to pay off your mortgage quicker, you have three basic options; reduce your amortization period, increase your monthly mortgage payment or change the way you make your payments. If changing the way you make your payments sounds appealing, than accelerated bi-weekly mortgage payments might be just the ticket. Not to be confused with semi-monthly mortgage payments (24 payments per year), accelerated bi-weekly mortgage payments (26 payments per year) will not only pay your mortgage off quicker, but it’s guaranteed to save you a significant amount of money over the term of your mortgage. Here’s how it works. Let’s say you have a mortgage of $100,000, an interest rate of 5.00% and an amortization period of 25 years. Your monthly mortgage payment would be $581.60 and your total payments for a year would be ($581.60 x 12) $6,979.20. To understand the savings accelerated bi-weekly mortgage payments can make, take the monthly mortgage payment of $581.60 and divide it
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