Easy To Get It Going…..

Having a separate direct withdrawal mortgage is best.  It shows you exactly what is set aside for your payments, without getting any other money/payments mixed in.

Open the account and round up your mortgage payment, depositing that figure. This amount will be your ‘cushion’ in the account (never to be touched).  Just pretend it’s not there.

Now call your lender and tell them you want the bi-weekly option.  They’ll let you know when the 1/2 payments will begin.  Every 14 days 1/2 your mortgage will be automatically withdrawn.

Just make sure that when you deposit money to cover your mortgage, you deposit the full month payment (as though you were paying once a month). This assures that the second 1/2 payment for that month is there.  It is best to round up some when you deposit (adding to the cushion).

Twice a year, usually in Spring and Fall, a third 1/2 payment is withdrawn.  These 2 one half payments go directly, in full, towards reducing your principal.  It is imperative that you keep tabs on what the balance is in your mortgage bank account so that you don’t run short for those 2 extra payments….. it’s why rounding up is a good idea.  You can also add to your account over the year to make sure.  Always watch your bottom line.

If you use an amortization schedule (ask your lender for one), you can follow how those 2 extra 1/2 payments each year go to the principal (your equity), and how it also saves you paying interest on them.

All it takes is a phone call and some discipline, and you’ll shave length of time off your loan, and save thousands of dollars at the same time.  A smart move.