Biweekly Mortgages
If you wish to pay off your mortgage more quickly than with a traditional 30-year fixed-rate mortgage, significantly reducing the amount of interest you pay over the life of the loan, a Biweekly Mortgage may be for you.
Biweekly Mortgage payments are made every two weeks, resulting in 26 (sometimes 27) payments per year. As a result of the number and frequency of payments, you can pay off the loan faster than with a traditional 30-year, fixed-rate, monthly payment mortgage. For example, a loan that ordinarily would take 30 years to amortize fully could be paid off after just 22 years of biweekly payments depending on the interest rate of the loan.
A Biweekly Mortgage may also save you interest expenses over the life of the loan. For example, a $150,000 loan at a 7 percent interest rate paid monthly over 30 years will cost a borrower approximately $53,325 more in interest over the life of the loan than a Biweekly Mortgage for the same loan amount and interest rate.
Loan Features
Make a payment every 14 days instead of once a month (using a 365-calendar day year), so each payment amount is half the monthly payment for a comparable fixed-rate mortgage.
Payments will be applied to interest, principal, and other charges when received, resulting in a lower overall interest payment.
Considerations
Build up equity in your home, save on interest expenses, and pay off your loan faster than with a traditional 30-year, fixed-rate monthly payment mortgage, since making payments every 14 days is similar to making one extra payment per year.
Because biweekly payments are half the amount of comparable monthly payment mortgages, the Biweekly Mortgage does not require significant additional outlays in order to obtain the benefit of a faster payoff.
Biweekly payments can be timed to coincide with payroll deposits for easier budgeting.
Sell a Home and Save up to 1%
E-mail jill@texascashbackrealestate.com today
-- Or -- Call us anytime at (281) 334-CASH
Texas Cash Back Real Estate
