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The biweekly mortgage has been around for years but with the recent media attention to the real estate industry in general and the mortgage industry in particular, the biweekly has been getting thousands of home owners to use this simple, yet powerful, way to speed up the principal payment process. Why is this so popular? How does it work? How can I do this?
Here is why this is so popular to hundreds of thousands homeowners. It is an easy and effective way to increase the equity in a home. It can also shorten the life of the mortgage substantially. It does this with just about the same mortgage payment that one usually makes per month so it is affordable to anyone who owns a home. The biggest obstacle is just doing it.
Biweekly means that the homeowner will make a payment every two months instead of once per month. Basically what you do is take your monthly payment, cut it in half and then make that payment every two weeks. So how does this save money? Well, by paying every two weeks you will actually end up paying more off the principal every year because:
1. There are 52 weeks in a year.
2. That means you make 26 payments a year.
3. With the monthly payments you would make the equivalent of 24 payments a year.
4. The 2 payments extra would go towards your principal.
5. This accelerates the payment of the loan and each month the principal gets paid by an ever increasing rate.
The great thing about this is because each month is only a few days over 28 days ( 4 weeks) the biweekly mortgage payments are not a hardship on any home owners. The most extra days in a month are 3 and some months have 0 or just 1 extra day.
So why wouldn't everyone just do this? I think much of it has to do with either they don't know about it or they think " I can just pay extra off my principal anytime I want. Why pay biweekly?"
But the problem is that a large percentage of people don't ever make any extra payments to their principal. They think about it but don't do it. There is always other more important things to use the money for, even though the actual money they need every month to make a big difference is quite low.
Discipline is a key factor here. If someone has enough discipline it really isn't necessary to use a biweekly mortgage plan. This doesn't mean that people who don't use a biweekly aren't disciplined. Only those who want to pay down their mortgage principal but never seem to be able. So, in a way the biweekly is just a formula to help homeowners, who are usually very busy with other parts of there life, become more disciplined and make them pay off the mortgage principal more quickly. With today's prices, a homeowner can save over $50,000 and cut 5 years off the life of the mortgage!
Copyright 2005 By Tim Phelan
Tim Phelan is a full time internet marketer who has been self employed for the last 12 years. Real estate, the environment, art, world culture, politics are some of his other interests. For a totally free biweekly mortgage manager visit this link: TimPhelansblog.mortgagemanager
MORE RESOURCES updated Tue. September / 22 / 2020
Mortgage and refinance rates today, September 21, 2020 | Mortgage Rates, Mortgage News and Strategy - The Mortgage Reports
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Mortgage lenders are adding the refinancing fee. You can still avoid it if you act now. Bankrate.com
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A record number of borrowers can now save on a mortgage refinance, as rates set another historic low CNBC
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Millennials drive huge VA home loan refinance boost in Hampton Roads - The Virginian-Pilot - Virginian-Pilot
Millennials drive huge VA home loan refinance boost in Hampton Roads - The Virginian-Pilot Virginian-Pilot
The Uncommonly Strong Case For Locking a Mortgage Rate Mortgage News Daily
U.S. mortgage rates hold steady at historic low mark Dayton Business Journal
Your weekly real estate roundup: Atlantic City condo, prepaying on your mortgage, Will Forte's house and more - Press of Atlantic City
Your weekly real estate roundup: Atlantic City condo, prepaying on your mortgage, Will Forte's house and more Press of Atlantic City
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Fannie's Forecast Sees a Brightening Recovery Mortgage News Daily
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It’s a Great Time for Co-ops to Refinance, If… Habitat magazine
Mortgage Applications Dip in Mid- September World Property Journal
When should you refinance your mortgage? Fox Business
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State firm caps cheap mortgage at Sh4 million Business Daily
Don't let mortgage rates distract you. You should also consider this when refinancing - Fox Business
Fed's mortgage-buying spree at $1 trillion with no end in sight Pensions & Investments
Lenders Upbeat About Profits, Loan Demand Mortgage News Daily
Student Loan Refinancing Rates Hit Another New Low Credible News
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How to get a low-cost mortgage refinance Bankrate.com
Mortgage refinancing is about to get more expensive Pittsburgh Post-Gazette
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Refinancing Your Mortgage? Those Rock-Bottom Interest Rates Aren’t for You - The Wall Street Journal
Refinancing Your Mortgage? Those Rock-Bottom Interest Rates Aren’t for You The Wall Street Journal
What Is a Mortgage? Everything to Know About Home Loans Credible News
Mortgage refinance applications spike 79% as homeowners rush to take advantage of lower rates - CNBC
I refinanced my mortgage during COVID-19, and thanks to low interest rates I'll save about $50000 - Business Insider
I refinanced my mortgage during COVID-19, and thanks to low interest rates I'll save about $50000 Business Insider
Rushing to Refinance Your Mortgage: 6 Tips and What to Avoid The New York Times