The mortgage is almost always the biggest expense for any person or family. And given that most of them are hundreds of thousands of dollars, paying them off early can make a big difference! Each situation is different, but here’s one thing you can do to end that mortgage early (without paying more out of pocket)!
Here are Five Fast Facts on biweekly mortgage payments:
- ☝️ One Small Change - Paying your mortgage biweekly means you send in a payment every two weeks rather than twice a month. It might not seem like a big difference, but over the course of the year that means you’re making 26 payments rather than 24 - you’ve paid for a whole extra month! And you still got your Starbucks. #winning
- 🤯 Big Results - Depending on the details of your loan, this can fast track your payoff by as much as 6-8 years! And, it’ll save you literally thousands of dollars over that time period.
- 💰 That’s Interesting - Paying biweekly doesn’t change your interest rate, but it does mean you’ll pay less interest. Your extra payments apply to the principal itself, which drives down the balance you owe, which means there’s less money to charge interest on. Money back in the pocket!
- 👍 Why To Do It - Obviously, the biggest reason is to pay off the mortgage sooner. But you also pay less interest overall, you build equity faster, and it’s a simpler budget (especially if you get paid biweekly, too). That’s a whole lotta’ icing on the cake!
- 🤔 Maybe Not - Paying biweekly means you’ll have to watch your budget more closely to manage two big chunks coming out instead of one. And watch your lenders (i.e. read the fine print) - sometimes they have prepayment penalties, extra processing fees, or might only apply your payments once a month even if you pay more. 👀
🔥Bottom line: There’s nothing stopping you from making those extra payments to interest at any time, but by switching to biweekly payments you can automate the process so you don’t have to think about it. If you’ve got the cash flow and can manage the budget, it could be a great way to speed up that huge chunk of financial freedom! Just make sure it’s the right path for you before you switch.
Do you use biweekly payments (or are you going to switch to them)?
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