The biweekly mortgage has been around for years but with the
recent media attention to the real estate industry in general and
the mortgage industry in particular, the biweekly has been
getting thousands of home owners to use this simple, yet
powerful, way to speed up the principal payment process. Why is
this so popular? How does it work? How can I do this?
Here is why this is so popular to hundreds of thousands
homeowners. It is an easy and effective way to increase the
equity in a home. It can also shorten the life of the mortgage
substantially. It does this with just about the same mortgage
payment that one usually makes per month so it is affordable to
anyone who owns a home. The biggest obstacle is just doing
Biweekly means that the homeowner will make a payment every
two months instead of once per month. Basically what you do is
take your monthly payment, cut it in half and then make that
payment every two weeks. So how does this save money? Well, by
paying every two weeks you will actually end up paying more off
the principal every year because:
1. There are 52 weeks in a year.
2. That means you make 26 payments a year.
3. With the monthly payments you would make the equivalent of
24 payments a year.
4. The 2 payments extra would go towards your principal.
5. This accelerates the payment of the loan and each month the
principal gets paid by an ever increasing rate.
The great thing about this is because each month is only a few
days over 28 days ( 4 weeks) the biweekly mortgage payments are
not a hardship on any home owners. The most extra days in a month
are 3 and some months have 0 or just 1 extra day.
So why wouldn't everyone just do this? I think much of it has
to do with either they don't know about it or they think " I can
just pay extra off my principal anytime I want. Why pay
But the problem is that a large percentage of people don't
ever make any extra payments to their principal. They think about
it but don't do it. There is always other more important things
to use the money for, even though the actual money they need
every month to make a big difference is quite low.
Discipline is a key factor here. If someone has enough
discipline it really isn't necessary to use a biweekly mortgage
plan. This doesn't mean that people who don't use a biweekly
aren't disciplined. Only those who want to pay down their
mortgage principal but never seem to be able. So, in a way the
biweekly is just a formula to help homeowners, who are usually
very busy with other parts of there life, become more disciplined
and make them pay off the mortgage principal more quickly. With
today's prices, a homeowner can save over $50,000 and cut 5 years
off the life of the mortgage!
Copyright 2005 By Tim Phelan
Tim Phelan is a full time internet marketer who has been self
employed for the last 12 years. Real estate, the environment,
art, world culture, politics are some of his other interests. For
a totally free biweekly mortgage manager visit this link:
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