Huge Mortgage Savings Hack

You can save TONS with bi-weekly mortgage payments!

For example, if your mortgage payment is $3,000, you’d pay $1,500 at the beginning of the month, and then the other $1,500 two weeks later. Then continue that process every 2 weeks for the rest of the year—ideally with automatic payments you can set and forget. Because the calendar doesn’t split months evenly, you’ll end up making 26 half payments over the course of the year, or 13 total monthly payments, instead of 12. In the lifetime of a $500,000, 30 year mortgage, you'd save just under $150,000! Plus, most SF mortgages are much higher, which makes the savings even greater!

To ensure your biweekly mortgage payment plan works the way you intend it to, confirm that:

• Your lender or servicer allows biweekly mortgage payments.
• Your extra payments are applied to the loan principal.
• You won’t be charged a prepayment penalty or fees for setting up or maintaining the payment plan.
• Your interest rate won’t change (unless you have an adjustable-rate loan).

If done right, making biweekly mortgage payments leads to less interest paid over the life of your loan, saving you money and whittling your balance down sooner. However, you must confirm that the extra payments are being applied to the principal and that you’re not subject to prepayment penalties.

Remember too that, in some cases, paying off your mortgage at a faster pace means taking money away from other financial obligations. Before you commit to biweekly payments, take a thorough look at your budget and goals.