Can Bi-Weekly Payments Speed Up Your Mortgage?
There are many people in our country who like to debate whether making bi-weekly payments actually speeds up your mortgage.
As a Fayetteville mortgage lender, this is one of the questions I am faced with on a consistent basis.
When you first think about it, it seems like a no-brainer. “If I am making more payments then I will definitely pay off my mortgage faster!” However, that may not be the case.
If you have the option of making bi-weekly mortgage payments, it’s important to take a step back and consider the benefits and drawbacks to doing so.
There are some third-party lenders out there who off these bi-weekly payment plans. How they work is they require you to submit your payment every two weeks to whoever is servicing your loan, but then they hold your money until your second payment comes in. So, in the end, you’re basically still paying your mortgage one time per month.
Depending on the company offering this, you could end up paying more money in the end because they may charge additional fees to manage the payments on your behalf.
However, just because these third-party companies may not benefit you doesn’t mean that you can’t start a bi-weekly payment plan of your own to speed up your mortgage!
Many mortgage lenders will allow you to make additional payments whenever you wish. If you get a bonus at work, money as a gift, or any kind of scenario where you can some additional cash, put it towards your mortgage. You can also take the amount you would normally pay at the end of the month and cut it in half, only to pay one-half every two weeks. You will end up paying the same amount at month’s end, but it can potentially help relieve some financial stress.
If you’d like to learn how you can shorten the term on your mortgage or potentially decrease the amount you pay each month, consider speaking to a Fayetteville mortgage lender like Jeff Wilmoth. A qualified mortgage professional, Jeff can help you find ways to help save money and secure the best deal that’s right for you.
For more information, contact Jeff today!