Benefits of Bi Weekly Mortgage Payments
Bi-weekly mortgage payments involve paying half of the required mortgage payments twice monthly, instead of the full amount once every month. It is vital that you realize that this particular payment arrangement does not lower the compound interest that you are supposed to pay. However, bi-weekly mortgage payments may provide several advantages like the ones below.
1. Reduce mortgage period
The largest advantage of opting for bi-weekly mortgage payments is that it is possible to pay off the mortgage early. This is can save you lots of money with regards to the interest you are supposed to pay. Most homeowners normally use the bi-weekly payment plan since these savings are going to be very significant. They will be able to complete their payments about two years early.
2. Better budgeting
Because payments in the bi-weekly plan are much lower than the typical monthly payments, they are also much simpler to fit into a budget. Actually, many organizations that offer bi-weekly mortgage payment services are going to allow you to customize your payment dates to better fit your earnings. This allows you to make the payments immediately after you have been paid.
Another advantage of bi-weekly mortgage payments is the fact that they are very convenient, particularly if you normally get paid two times during a month. This offers an excellent opportunity of automating the payments. This means that a homeowner can set up a system with his or her bank such that the two payments are made immediately the money is accessible in the account. The end result is much simpler payments with limited hassles.
Even though the bi-weekly mortgage payments might sound wonderful, this payment plan has certain demerits linked to it also. The most significant drawback is that there are normally expensive fees required for enrolling in the bi-weekly program.