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Bi-Weekly Mortgage Payments

To save money and get out from under their mortgage payments quicker, some families are opting to pay their mortgage payments as bi-weekly payments instead of the traditional one payment per month. At the end of one year, a homeowner will have paid to their mortgage company the equivalent of 13 payments instead of 12.

A mortgage calculator is used to determine a bi-weekly payment, which essentially cuts a monthly payment in half so that the homeowner is paying every two weeks and assuming there are only four weeks to a month. At the end of the year, the calculations for the total payments come out to be 26 bi-weekly payments or one extra monthly payment. The extra payment accelerates the mortgage payoff because the moneys go directly to the loan's principle and not the interest.

By doing this simple recalculation, a homeowner can shave off years from their home loan and save thousands of dollars in interest payments. Additionally a homeowner will build up the equity in their home faster, this is good news if they go to sell the home or need a home equity loan for personal use.

Making a payment every two weeks are not hard to do; you are simply cutting the larger payment in half and sending in half your mortgage payment every two weeks. The interest a homeowner owes on their home has less time to accrue, this means that more of the mortgage payments are going to pay down the principle and not the high interest on the loan.

The bi-weekly payments must be done correctly and accepted by the lending institution to be a savings to the homeowner. They need to be made bi-weekly, every two weeks, no matter what they calendar shows. For example a $100,000 home at 7% interest borrowed for 25 years will reduce the payment time to 20.5 years and the total with interest down from $112,038 to just $88,595.

It is never too late to begin a bi-weekly mortgage payment plan. Your bank or mortgage lender can set up the bi-weekly payments to be withdrawn from your checking or savings account.

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