Is it worth making Bi-Weekly Mortgage Payments?
Loan servicers often send solicitations to homeowners touting the benefits of bi-weekly mortgage payments. This payment structure may, or may not be good for you.
Bi-weekly payments do help you pay off the home quicker, as you‘re essentially making 13 payments per year instead of 12 (bi-weekly = 26 half payments = 13 full payments). However, these notices usually have a catch in that the servicers generally charge a fee to set up these bi-weekly payments for you (or they charge an ongoing processing fee). Remember, loan servicers are typically striving to put more money in THEIR pockets, not yours.
If you want to accelerate the payoff of your loan by making extra loan payments, that can be a great idea! But, you can always do this on your own. If you decide to make extra payments, just make sure you indicate your intentions to have this extra money go toward principle at the time you make the payment.
Let’s dive deeper to see if bi-weekly payments are good for you.
- You can pay off your home quicker
- You save thousands in interest
- It’s easy to implement
- Loan servicers usually charge a fee (but you can do it on your own)
- You may have better places to put the extra money (see below)
OTHER OPTIONS TO CONSIDER:
- Payoff debt (especially consumer debt like credit cards, student loans and car loans)
- Give a boost to your emergency savings
- Contribute to retirement accounts (maybe your 401k at work with the company match)
- Save for other goals (house down payment, kids’ college education, etc.)
Contact us any time with questions...we're here to help!
Copyright © 2022 Chad Peshke LLC, All rights reserved. NMLS #2244878. Material contained in this website is for informational purposes only and is not meant to be construed as direct financial advice for your specific situation. It's recommended that you consult with your own advisors for personalized financial guidance. Since we're not licensed attorneys, we cannot provide legal advice. As such, any info contained in this website should not be construed as direct legal advice. While Chad Peshke LCC is registered/approved with CA & ID, the trade name "CP" is not approved to be used in ID. This has no impact on our ability to legally do business in CA & ID as Chad Peshke LLC.