Biweekly mortgage payments

February 18, 2009
Matt Isleib

 

There is a misconception surrounding biweekly payments that a lot of borrowers have. It is no doubt correct to say that biweekly payments can save you money. It pays your mortgage off quicker and helps build up equity faster. However often times lenders use intermediary companies to handle and set up the biweekly payments. These companies often charge upwards of $500 dollars to set up the biweekly account as well as charge a per transaction fee.

 

The misconception here is you really do not need to pay anybody to set this up. The whole notion behind the biweekly payment is by paying your mortgage every two weeks you are making 26 payments a year which equates out to 13 monthly payments per year or one extra payment. Why pay a third party upwards of $500 for this option as long as you are self disciplined enough to make an extra payment per year keep your set up fee and per transaction fee for yourself.

 

The bottom line here is the faster you pay off your mortgage the better. However there is no need to pay someone to help you facilitate this goal. With some simple self discipline you can save your money and achieve the same goal. And if you happen to find a lender that offers this service for free, great take advantage of it otherwise you can very easily do it yourself.

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