Many homeowners are hesitant to pay their mortgage more than once a month. But with online banking and automated payments, it’s easy and convenient. So, if you want to pay off your home faster, build equity more quickly, pay less interest, and save money, think about making weekly or biweekly mortgage payments.
Biweekly Mortgage Payments
Making biweekly mortgage payments is a good way for many homeowners to save money over the long term.
To make biweekly mortgage payments, divide your monthly mortgage payment in half, and pay that amount every two weeks. You will make 26 payments per year, which equals 13 months of your mortgage payment.
Besides paying more on your mortgage every year, many people find that this helps them budget their finances. And from a financial perspective, you’ll pay your mortgage more quickly, pay less in interest over the term of the loan, and save thousands of dollars.
Weekly Mortgage Payments
For some homeowners, making weekly mortgage payments may be more effective. Weekly mortgage payments enable you to make 52 separate payments.
To make weekly mortgage payments, divide your monthly payment by 4, and pay that amount every week. By making a mortgage payment 52 times annually, you are actually paying 13 months of payments every year.
The advantage of weekly payments over biweekly payments is that you are getting money to the lender earlier, which is applied to your principal earlier, which reduces the total amount of interest you’ll pay over the life of the loan.
And once again, for homeowners who want to stick to a strict budget, weekly mortgage payments is a fantastic way to keep their finances on track.
Check with Your Lender Before Making Biweekly or Weekly Payments
If you want to take advantage of the cost savings generated by making weekly or biweekly mortgage payments, contact your lender and ask about making early payments on your mortgage.
Make sure early payments will be applied immediately to your mortgage, thereby reducing the amount of interest you’ll pay over the life on the loan. Some lenders simply hold early payments, and do not apply them as an early payment; therefore, the interest paid over the life of the loan is not reduced.
Also, ensure there are no costs associated with making early mortgage payments.
The advantages of making weekly and biweekly mortgage payments continue to ring true in 2017. By making weekly or biweekly payments on your mortgage, you can shave as much as 4 years off a 30-year mortgage, build equity in your home more quickly, and save thousands of dollars over the course of the loan.
But speak with your lender first, before making multiple payments per month, to make sure early payments are immediately applied to your principal, reducing the amount you will pay in interest over the life of the loan.
Marimark Mortgage is based in Tampa, Florida, and serves the mortgage needs of homebuyers and homeowners in Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing, and help clients with HARP refinancing to lower their monthly mortgage payments.