The bottom lineīiweekly mortgage payments can be a good option for a borrower who wants to save on interest and pay their loan off ahead of schedule. If your lender doesn't offer a biweekly payment option, you can make extra payments yourself. These companies often charge an upfront setup fee and monthly fees. Quick tip: Avoid signing up for biweekly mortgage payments through a third-party processing company. If your lender agrees to biweekly payments, it's a good idea to get this agreement in writing. Will making extra payments inflate my escrow cushion?.Are there any extra fees I should know about?.Will my extra payment be applied toward the principal only?.Here are some questions you can ask your lender: You want to understand your lender's policy regarding biweekly payments before you set it up. Some lenders make this easy and allow you to enroll on their website. This information is outlined in the loan terms you signed when you initially took out the mortgage.įrom there, you can contact your lender to set up a biweekly mortgage payment. Once you're in a good financial position, you can find out whether your lender allows partial mortgage payments. If you're currently carrying a balance on a credit card, it's a good idea to pay that debt off first before making extra payments on your mortgage. "Although it's much better to avoid it in the first place if you can." How to set up a biweekly mortgage paymentīefore making biweekly mortgage payments, think about any other outstanding debt you have. "Even if you have to pay escrow in addition to the payment, you can still get money back from the extra or have it applied in advance," she says. While making a biweekly payment to your mortgage would typically include homeowners insurance and taxes - known as an escrow payment - Sprague Gerber says you can manually go in and make a payment that goes exclusively toward the loan principal instead. Means you'll have less money for other expenses. ![]() Here are some advantages and disadvantages of biweekly mortgage payments: You should also ensure you won't be charged a prepayment penalty for paying off your mortgage early. You'll have to contact your lender to ensure they'll allow biweekly payments and that the additional payment will go toward the principal. ![]() And the set up process isn't quite as easy as making monthly mortgage payments. However, biweekly payments mean you'll have less money for other household expenses. It will also help you build equity in your home sooner, which has numerous benefits. Making biweekly payments will save you money on interest and help you pay off your home faster. Pros and cons of paying your mortgage biweekly
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