Question:

Should I use a bi-weekly mortgage company?

Answer:

Find a bi-weekly mortgage company on the web or in your neighborhood. There will be many bi-weekly mortgage companies offering to shorten your mortgage term and increase savings dramatically.

True, this is possible. However, a bi-weekly mortgage company only helps serve as a middleman between you and your lender, nothing more. Since lenders will often require a costly setup fee and/or servicing fee to accept bi-weekly payments from you, borrowers will often like to gain the benefits of bi-weekly amortization without having to pay too much for this opportunity. And also, you can't just start mailing payments to your lender twice a month.

Rather, you will contact a bi-weekly mortgage company who will debit your account twice a month and will then make the regular monthly payment to your lender. The interest accrued on the money while sitting with the bi-weekly mortgage company makes for one additional monthly payment per year.

However, any time there is an intermediary between you and your lender may cause potential problems. For example, if your funds have not been transferred to your lender on time, you may have to pay those funds again, even though you already made the payments to the bi-weekly mortgage company.

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