Shave Time and Interest Costs

The majority of those with a mortgage will have a 30 year fixed.  There should be no pre-pay penalties.  So….

The earlier the better to begin making bi-weekly payments, the better.  Over the length of the loan it will shave at least 2 1/2 years off the maturity date as well as thousands of dollars in interest costs.  It’s free!  A no brainer!  Just call your lender to start.

Before you make the call, make sure you have at least an extra months’ payment in the account.  And when you deposit the payment amount into the account, round up (as much as you can)….. this insures that when the 2 extra 1/2 payments is due (twice a year, usually Spring and Fall), the money is there when the lender withdraws the 1/2 payment.

With a regular 30 year mortgage, 12 payments per year are made on a set date each month. But a bi-weekly schedule means that there will be 26 payments per year…. every 14 days.

Two payments for each month to equal the 12 usual payments, and 2 more (Spring and Fall) will be withdrawn in 1/2 payment and 1/2 payment each to equal 13 payments for the year.

This added full payment goes DIRECTLY to reducing your PRINCIPAL.  So, if your mortgage payment is $1,500. per month, that 13th payment (1/2 and 1/2) will cut $1,500. per year off your principal (or $45,000) off your loan total as well as the interest for it.

Just be disciplined…… make sure you have the money in the account to cover it.  Just a phone call…….  It’s free to do.

And remember, any time you’re able to put any additional amount towards your principal, do so….. this too saves you interest and shortens your loan maturity date…. even $50. here and there helps.

It’s common sense!