Biweekly Mortgage Programs - Are They Worth The Money?

These programs basically offer what is known as a biweekly mortgage. The company will charge a few hundred dollars to enroll in their plan, as well as a fee every fourteen days. By enrolling, you agree to let them take one half of your mortgage payment out of your bank account every fourteen days. The plans do work as advertised, but not because of any monetary magic used by the lenders that provide the services. The programs work because you are paying more money.

There are fifty-two weeks in a calendar year. By taking one half of your house payment out of your savings or checking account every 14 days, you are making twenty-six half-payments, or thirteen full payments per 12 months, as opposed to the twelve payments you were making previously. By making an extra payment every year, you are repaying your mortgage principal sooner and reducing interest that will be applied to the remaining balance. This will, over time, take a number of years off of the time it takes to repay your home loan.

Are these plans worth your while? They might be, but only if you are a bit lazy. It isn't necessary to enroll in a plan or pay upfront and pay monthly fees to exploit this method of repayment. Most any lender will allow you to pay additional money for any reason at all. All you need to do is indicate that the extra money is to be credited to the mortgage principal. Many lenders provide a place on the form that you mail in or use on their Website for that exact purpose. You may send in a bit of extra money each month, or you could mail in one full extra payment each twelve months. The net effect is the same no matter what you do.

If you are curious about making extra payments towards paying off your mortgage early, all you have to do is get in touch with your lender and ask what options might be available to you. You will probably learn that any one of a number of free opportunities are there.

©Copyright 2007 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including HomeEquityHelp.net, a site about home equity loans, mortgages and refinancing.

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