Biweekly mortgage programs are being advertised everywhere. Many of these services charge large fees to set this up for you. What many citizen don't know is that you do not need one of these services to take benefit of these benefits.
In essence, a biweekly mortgage allows you to pay one extra cost a year thus saving you thousands of dollars in interest and paying off your mortgage early. Let's study this a small deeper.
Calculate Mortgage Interest
The bi-weekly mortgage process is well straightforward once you see how it all works. Most homeowners have a fixed rate mortgage with 12 monthly payments per year. To get started let's look at a calendar.
Now that you have a calendar let's get started. Start by circling every other Friday for a whole year. Now go back and count all the circled Fridays. As you will see there are 26 of them. Let's consider these Fridays as your new cost dates. If Fridays are not good for you, select someone else day of the week. The process is the same for all of them.
Now divide your monthly mortgage cost in half. This half cost is now your new bi-weekly mortgage payment. Look back at the calendar and you will see that two of the months have three cost dates.
The two months where you pay three biweekly payments rather than two make up the 13th mortgage payment. This one additional cost is credited towards the primary mortgage equilibrium and will save you a lot of money on interest and allow you to pay off your mortgage on average 7.5 years sooner.
Call your mortgage lender and ask them about setting up biweekly payments for you. Many banks and mortgage lenders will gladly set this up for you via a bank draft at no charge or you can simply mail the biweekly cost in just as you would your full monthly payment.
In Closing
A biweekly mortgage calculator is an easy to use tool that will demonstrate for you how much money you can save by production these payments as scheduled. Finance News Today offers a free bi-weekly mortgage calculator that will calculate payments and interest savings.
How A Bi-Weekly Mortgage Calculator Can Help You Save Money Calculate Mortgage Interest
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