![]() ![]() But money expert Clark Howard says it shouldn’t get in the way of some other important financial goals that need to take priority in your is a product of ICB Solutions, a division of Neighbors Bank. The idea of paying off a mortgage early is alluring to a lot of us. Total interest you save over life of loan We used the biweekly mortgage calculator to pull the following ballpark figures: Principal There are a variety of biweekly mortgage calculators you can play around with to see how the numbers would work in your situation. The amount you can save by doing a biweekly mortgage varies based on your specific mortgage terms and how long of a loan term (15 year vs. Simple, right? And they didn’t have to pay Wells Fargo or any marketing company to do it for them! How Many Years of Payments Does a Biweekly Mortgage Save? So adding those two numbers together, you get the biweekly plan payment of $769.39. ![]() What you see above is an example from a mortgage held by a Team Clark staff member. Most lenders make it easy to do this with a clearly marked box that says “additional principal.” Wells Fargo monthly mortgage payment with additional principal If there is, that would likely negate the benefit of a biweekly plan.įurthermore, you want to be sure you’re applying the extra one-twelfth directly to the mortgage principal. Of course, you want to be sure that there’s no prepayment penalty on your mortgage. That way you’ll do for free what a marketing company wants to charge you for - and you’ll bring your principal loan balance down quickly! Over the course of a year, that equals out to be 13 payments in a 12-month timeframe. So you would pay $1,300 each month ($1,200 + $100) instead of just your regular monthly payment. Let’s say your monthly payment is $1,200. Keep making monthly mortgage payments as you always do and just add one-twelfth extra in the additional principal box on your monthly coupon. So what should you do instead of letting someone else set you up on a biweekly payment plan? Clark has a simple formula: If you pay a marketing company to set up a biweekly plan for you, they simply collect your money and make one additional payment toward your mortgage on your behalf at the end of the year. ![]() So the end result is that you pay 13 months of mortgage payments every 12 months. When you’re doing a biweekly payment plan, what you’re really doing is making the equivalent of 26 half-payments in a year. Here’s how to do it yourself for free… How Do You Make Biweekly Mortgage Payments? In reality, there’s no need to pay anyone to set up an accelerated mortgage payment plan. The marketing company may also charge a few dollars each time you make a biweekly payment. In fact, banks team up with appointed marketing companies to send out solicitations about biweekly mortgage payments for this purpose.īut here’s the thing: Very often there’s a charge of $200-$400 to set you up on a biweekly payment through a marketing company. When it comes to a biweekly payment plan, you can either set one up yourself or pay someone else to do it on your behalf. The basic idea behind a biweekly plan is that you make half of your monthly payment every two weeks. ![]() In the process, the plan also allows you to save big bucks that would be squandered on interest.
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