What is a bi-weekly mortgage?
A bi-weekly mortgage is a mortgage where payments of principal and interest are due every 2 weeks instead of monthly. The bi-weekly payment is roughly half of what a normal monthly payment would be. The theory behind bi-weekly mortgages is that by making a payment of principal and interest every 2 weeks, the borrower is able to pay down principal faster. The same results can be achieved by making one extra monthly mortgage payment per year, whether in one lump sum or spread out over 12 months.
A third party collects half your mortgage payment each two week period. They then pay the full payment to your lender every 30 days. Because of this process, and the odd number of weeks in a year, a thirteenth payment gets paid, each year, and you save 8-12 years off your mortgage, and $30,000 to $100,000, or more in interest. You pay no extra monies a month, to your principal. Your household budget does not change. However, this is the basis for even bigger savings, as the Bi-Weekly plan is only the first foundation you lay to quick pay a mortgage. What if you add extra principal payments yourself? We have an e-book to show you dozens of methods to pay off a mortgage in record time. We can also help you set up a Bi-Weekly system. Think Like The Wealthy! Some people are going to pay a half million dollars for their $200,000 homes. Others will pay one million dollars for their $400,000 homes. That is the sad fact for any one who intends to take 30 years to pay off their mortgage. People
The bi-weekly mortgage gets its name from the frequency of its payments, which occur every fourteen days. Each payment however, is half the amount of a monthly payment. A traditional 30 year fixed rate mortgage has twelve monthly mortgage payments a year. A bi-weekly mortgage, on the other hand, with payments due every fourteen days, requires 26 payments (in some years 27 payments) over the course of a year. The advantage of a bi-weekly mortgage includes substantial interest savings, fast equity build up and a shortened loan term.
