Have you ever wondered if there are any alternatives to monthly mortgage payments?

If so, you’re in luck! There are some mortgage providers who offer bi-weekly mortgage payments. And yes, they function exactly as they sound! While the monthly mortgage payments system has individuals making monthly payments, the bi-weekly process allows the borrowers to make payments every two weeks.

If you are new to the concept and want to discover more about bi-weekly mortgage payments, then you have landed in the right place. Let’s take a few moments to review the bi-weekly mortgage payment process in greater detail.

How Do Bi-Weekly Mortgage Payments Work?

Based on the introduction, you might already have a basic idea about how bi-weekly mortgage payments work, right?

But let's see the deeper definition of it. Considering there are 52 weeks in a year, you pay 26 times a year by making a payment every two weeks. The mortgage payments are usually distributed among 12 monthly slots, but if you decide to opt for the bi-weekly mortgage payment system, you pay half of the monthly mortgage payment. In the end, you make 13 months full payment a year.

Seeing all these calculations, you might be wondering what difference it makes when you’re only submitting an additional payment each year.

The truth be told, this shortens your repaying time period to a great extent. For example, the difference can be as noticeable as a good four years in a 30-year long mortgage. So as you can see, it makes a considerable difference in the long-term.

The Benefits of Bi-Weekly Mortgage Payments

Shall we have a look at the benefits of considering the bi-weekly mortgage payment system as a potential repaying option?

Saves Paying More Interest
The higher the borrowed amount and the interest rate, the more you will be saving. Since an additional mortgage payment is made every year, it is added to the principal amount of the loan. The quicker that the total amount of the loan is reduced, the more you will be saving from paying in the interest.
To some, making bi-weekly mortgage payments means a higher cash outflow. But, if you consider the effects it will have in the long run, you’ll see that you are actually reducing the cash outflow. Doesn’t that seem like a much smarter method?
Repaying the Mortgage Faster
Who doesn’t like to get over with the loan lingering over their head quickly? Now when paying the whole amount immediately is not an option, seeking out alternative ways to quickly reduce and pay off your loan amount is the natural next step. Hence, a bi-weekly payment is an excellent option to smoothly and quickly get done with your more mortgage loan payments.
Home Equity is Built Sooner

The extra payment every year adds up and allows the borrower to own the house sooner. Isn’t that what we all need?

The more you pay, the more portion of the house you will own. It's a technical way of evaluating that the more you pay, the quicker you will be eligible to own the house. So it comes as a fascinating idea to pay your mortgage payments via the bi-weekly method.

Who Should Opt for Bi-Weekly Payment?

When talking about the benefits that bi-weekly payments provide, you might find yourself wondering who it suits the best, right? Well, the answer is everyone! However, if you don't want to rely on this vague answer, then we have a streamlined one for you as well.

Bi-weekly payments are best suited for people who are smart and want to save in the longer run. If that sounds good to you, then this mortgage payment system is for you, my friend!

On a serious note, as we mentioned earlier, bi-weekly payments could significantly reduce the loan period enabling you to pay off the loan more quickly. However, it also helps you save on interest and stress too. But, if you are still unsure, then here are some factors that will help you make a better-informed decision:

What are your debts?
Your current debt situation is likely to determine your choice of bi-weekly mortgage payments. For example, if you think you have a lot to pay already on your existing loans and two additional mortgage payments will be difficult for you to manage, you might not opt for it.
However, if you think you have too many debts to manage, bi-weekly mortgage payments might come as a breath of fresh air since they will allow you to quickly get done with at least one loan.
Do you have the emergency fund sorted?
There is no point in making mortgage payments every two weeks if you don't have an emergency fund set aside for rainy days. But as soon as any unexpected situation arises, you will find it hard to juggle between bearing your living expenses and making bi-weekly mortgage payments.

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Unlike other lenders, we don't leave you to suffer. If you choose our services, we will dedicate ourselves to helping you find the best financing options, ensuring that those options will be considerate of your current financial position so that you can find the perfect house for you at the perfect price and interest rate.

Final Thoughts

The bi-weekly mortgage payment method definitely has so much good to offer. However, it’s crucial that you’re informed of all your options and that you fully understand the ins and outs of this repayment method so that you can make the best decision for yourself and your financial situation. Please consider all factors, including the pros and cons, to see if you are in the right position to opt for bi-weekly mortgage payments.

Author Bio

Will Foster | First State Bank Mortgage Senior Loan Officer

I became a mortgage lender in 2010, right after the "bubble" popped, and the mortgage industry underwent an incredible transformation. This has given me a unique advantage in the fact that I have never known anything other than the highly-regulated world we now live in.

Throughout my years of experience, my primary goal has been to keep up with the constant changes in the industry so I can help my clients investigate all of their options and maximize savings. In addition, because I specialize in Conventional, FHA, USDA, Jumbo, portfolio, and VA refinances and purchases, I can help a wider variety of individuals, families, and investors identify and secure the right loan to best suit their future interests.

The mortgage process can be a little confusing and even overwhelming these days with all of the regulations. I guide my clients through the process from start to finish, and I try and make it as painless and hassle-free as possible.

How helpful did you find the blog? Also, what are your two cents over bi-weekly mortgage payments? Do you think it’s a good idea?

Are Bi-Weekly Mortgage Payments a Good Idea?