Question:

What is accelerated mortgage payment plan?

Answer:

Knowing how interest is calculated on your loan, you could use an accelerated mortgage payment plan to help amortize your mortgage faster, and reduce greatly the interest cost (IC) of the loan.

How about a biweekly plan to accelerate mortgage repayment?

You lender is probably charging a fee for the setup of a biweekly payment plan. However, it may be worth it, even if it is several hundred dollars. Still, if the setup fee is too big, try negotiating it with the lender.

A bi-weekly schedule means your monthly mortgage payment is split in two and you send in half-monthly payment every two weeks. With 52 weeks in the year, the biweekly payment schedule results in 13 monthly payments a year.

Thus, your mortgage effectively amortizes faster with several years and saves you lots of cash in interest. If the lender applies the biweekly payments as received or deducted from your account, the effect would be even greater.

The biweekly plan is not the only way to accelerate your mortgage amortization. Making an extra payment towards the principal with your monthly payment or in a lump sum once in a year may prove a more flexible option for you.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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