Question:

How can I get real benefits of bi-weekly mortgages?

Answer:

The benefits of bi-weekly mortgages are realizable if you are careful that rules are applied properly. With a bi-weekly schedule you end up making 13 monthly mortgage payments and your loan's term is reduced. However, some lenders do not apply the payments you send directly towards the loan, but wait until the second payment arrives thus reducing greatly the benefits of bi-weekly mortgages and charging a fee for that.

Benefits of Bi-Weekly Mortgages

If you choose the right lender who declares to apply payments when received and not at the end of the month, or use a bi-weekly mortgage company to make payments for you, you may build up equity much faster than with conventional monthly mortgage payment.

Also, your payments may be arranged to be debited directly from your bank account; your loan term will be reduced with several years and you will save thousands in interest.

At the same time, be careful as there are bi-weekly mortgage scams, as well as the possibility of the bi-weekly company defaulting on your payments always exist. At the same time, paying the lender $1000 and over for the right to use a bi-weekly mortgage repayment plan is a little excessive. Better consider making additional payment toward the principal on your own to maximize benefits of bi-weekly mortgages.

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