The dream of paying off your mortgage fast may seem like an overwhelming task. After all, it is money that is involved. And it is not just an amount you can sneeze at; it is thousands of dollars. In this modern era of financial distractions, being able to pay such amount of money within a snap of your fingers is not common.
However, if you wish you to pay off your mortgage fast, you can do so by switching to a biweekly payment plan.
What is a bi-weekly Payment?
When you are dealing with your debt, and you are trying to pay it off, a monthly structure is available. This monthly structure includes interest which you deal with and, it pays off every month.
The point of you getting out of debt on time is to live your life and pursue your dream so you need to use the tools and the knowledge available to you that you can implement right away - bi-weekly payment is one.
A biweekly mortgage is like your traditional mortgage. What makes it different is that you will need to structure your payments. In other words, you won’t be making one payment at the start of a new month; you will be making half of your payments every two weeks.
Bi-weekly Payment Are Not Twice a Month Payment
The main difference between a fortnightly payment and twice a month payment is that you have to pay an extra month payment at the end of a year. So, there are 12 months in one year. At the end of the 12th month, you would have paid 13 months of payment without spending more than you are already paying every month.
With a bi-weekly payment, you only have to split your mortgage in half. You take care of the first half after the first 14days and the second half at the latter 14 days, so nothing is changing in your monthly payments. The only difference with bi-weekly payments is that you have to make sure your money is going towards the principal and not the interest charge balance.
How Does Bi-weekly Payment work?
- 52 weeks a year/ 2 bi-weekly payment in a month = 26 payments a year
- Divide 26 payment by 2 to get the picture of what a “full month’s payment” would be. 1 full month payment = 1 month
- 26 payment per year/ 2=13 full payments (13 months) instead of 12 monthly payment in a year.
You will make an additional loan payment per year without any extra effort. Bi-weekly payment can help you pay off your mortgage fast, but you will need to consult a mortgage advisor to know if it will suit you.
