Bi-Weekly Mortgage Payments: Is it a Scam or Will it Save you Big Money?
Bi-Weekly Mortgage Payments Revealed
Have you ever opened up one of your mortgage statments and seen an offer to participate in a bi-weekly mortgage payment arrangement whereby with no effort (other than a processing fee), you will be able to pay off your loan 7 years in advance of its actual 30 year term?
I probably shouldnt have even asked the question because if you are a homeowner then you have undoubtedly seen what I am talking about. It is absolutely true that if you abide by the terms of the arrangment you will accomplish your goals in the stated time period.
Here is what they aren't telling you though...
1. They are not making bi-weekly mortgage payments on your behalf. They ARE making bi-weekly deductions from your bank account.
2. The deductions are placed into a separate account from which they actually make your mortgage payments on your behalf.
3. During the course of an actual year, 26 deductions will actually occur. (1 every other week)
4. If you think about it, there should only be 24 deductions if it was truly 2 payments per month.
5. Therefore, they are actually taking 1 additional mortgage payment from you.
6. They take the additional mortgage payment and pay it to principal thus reducing your loan balance quicker than simply paying your mortgage at the end of the month.
Do you have to pay their fee to make all of this "magic" happen?
Absolutely not. Simply divide 1 payment by 12 and add this amount to principal every month and pay it right along with your normal payment. This is exactly what they are doing and now you are doing it for free.
I hope all of this wasn't too confusing, but if it was shoot me an email at firstname.lastname@example.org