Biweekly payments can save thousands of dollars and take 5-7 years off your mortgage. You can set up a money-saving mortgage payment plan yourself--easily and at no extra cost.
Here's how biweekly payments save time and money: By making biweekly payments, you actually end up making an extra monthly payment each year. Over the course of a year, you'd make 26 payments (one every other week for 52 weeks), which is the same as making 13 monthly payments. Making one extra payment per year will shorten the life of your loan and save you thousands of dollars.
But you don't have to make biweekly payments to obtain those savings. Here are a couple examples of how you can save big money, using the same basic idea:
If you get paid every two weeks, divide your monthly principal and interest payment in half and then send your lender a check for that amount during those months in which you receive three paychecks. Just sending in those two extra checks will be the equivalent of one extra payment a year.
If you don't want to send lump checks, you can get the same results by dividing your monthly principal and interest payment by twelve and then adding that extra amount to your payment every month. Normally, that figure won't put too much extra strain on your budget, and it will add an extra mortgage payment to your loan every year.
You really can save significant amounts of money and shorten the life of your loan by making extra payments.
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