How to Start Bi-weekly Mortgage Loans
If you have a conventional, 30-year fixed-interest loan, one option for payment you have is bi-weekly payments. When you pay bi-weekly, you end up making 26 half-payments a year. This means that every year you make 13 full payments, not 12. This will reduce your principal balance faster than just paying the standard monthly payment each month. Setting up bi-weekly payments is quite easy.
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Things You'll Need
- Checking account information (or savings)
- Mortgage account number
- Mortgage statement
Instructions
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Review your mortgage statement to determine what half a mortgage payment is. If the figure is complicated (like $654.343, for example) just round up a dollar or two to make sure a full payment will be posted each month. Any amount over the standard payment will go straight to the principal balance.
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Have your lender set up a bi-weekly payment schedule. Most lenders offer this service, but for a fee. While the cost is generally fairly low, you must weigh whether or not it is beneficial to have the lender deal with the debits and pay the service charge, or not.
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Set up bi-weekly payments on your own. This can be accomplished by speaking with a representative at your bank. You may even be able to set up automatic debits using the the bill-pay software on the bank's website. There is normally no charge for this service.
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Pay bi-weekly with a check. This is a more arduous process, but it will have the same effect as automatic debits. However, in order for this process to work, you must exercise strict discipline and not miss any payments every two weeks.
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