Instead of making your mortgage payments once
a month, make half a payment every two weeks. This is considered a bi–weekly
payment plan.
By making your payments every two weeks, you end up making 26 payments a year (52 weeks in a year divided by 2 = 26 payments a year). Making 26 payments a year (one every two weeks) is like making an extra month's payment each year (26 payments divide by 2 = 13 monthly payments). Making that extra monthly payment each year will cut your interest costs dramatically.
Here are some scary facts about mortgages:
After paying 15 years on your 30–year mortgage, you'll still owe 90% of he amount borrowed!
After paying nearly 24 years, you'll still owe over 50%.
You'll pay over 3 times the amount originally borrowed before paying off your mortgage.
To make matters worse, the FDIC estimates that 1 out of every 2 mortgages are miscalculated, overcharging homeowners $8 - $10 billion dollars each and every year.
On a conventional 30–year mortgage, you'll make over 120 unnecessary payments!
Here's what a few prominent publications and institutions have to say about
bi–weekly mortgages:
THE WALL STREET JOURNAL reports, "A $70,000 mortgage at 10.5% annual interest produces savings of $60,000 when repaid on a bi–weekly basis."
CONSUMER REPORTS says, "Whether you already have a mortgage or are in the market for a new loan, you can probably save tens of thousands of dollars by using a bi–weekly mortgage schedule".
According to USA TODAY, " What started as a mortgage lender's marketing gimmick is on its way to becoming the hottest home loan of the decade. It's the bi–weekly mortgage, and it is as simple as paying half a monthly mortgage payment every two weeks. The attraction: Bi–weeklies reduce interest expense and build home equity faster."
PARENT states, "The simple fact is that a bi–weekly mortgage schedule not only saves the homeowner a bundle, but makes him or her a homeowner much sooner.
According to THE NATIONAL COUNCIL OF SAVINGS INSTITUTIONS, "Bi–weekly payments are 'pro–consumer' because they correspond to America's paydays making mortgage payments much easier for homeowners who are on a tight budget or have a difficult time saving money."
THE WASHINGTON POST says, "IT PAYS TO CHECK LOANS FOR OVERCHARGES. Of 9,000 Adjustable Rate Mortgages checked, errors were found in nearly half. Average refund owed to the homeowner: $ 1,588.00."
