Bi-Weekly
Mortgage
Did
You Know?
Making one extra mortgage payment a
year will knock years off your mortgage and save you thousands of dollars. |
|
If you search for "bi-weekly
mortgage" with an Internet search engine, you will be overwhelmed by the number of
companies offering "Bi-weekly Mortgage Reduction Services" or "Bi-weekly
Savings Programs." Beware, you are entering dangerous waters.
Beware of Bi-Weekly Mortgage
Reduction Services and Savings Programs
These "Reduction Services"
and "Savings Programs" are charging you fees to "make a bi-weekly mortgage
payment" for you. The enticement is that they will save you an impressive amount of
money on your mortgage and reduce the number of years you pay on your mortgage.
The enticement is that they will
make bi-weekly mortgage payments for you.
The real story is that they are
not actually making bi-weekly payments on your mortgage. They are making
bi-weekly deductions from your bank account. These funds are placed into an account
from which your monthly mortgage payment is made (which only takes 24 deductions - but
during the course of a year 26 deductions will be made from your account). With the extra
2 deductions, the "Service" makes an additional mortgage payment. In other words
rather than making 12 mortgage payments, 13 payments are made.
The enticement is that they are
providing a special service to you that would either not be possible for you to get on
your own or that you won't have the time or discipline to make it happen.
The real story is that you can
easily make an additional mortgage payment each year. An easy way to do this is to have
your mortgage payment automatically deducted from your account each month with an
additional 1/12 payment to be applied to the principal amount. At the end of 12 months,
you will have made an additional payment. And you won't have to pay any fees to a
"Service". |
