Biweekly Mortgages

Typically, homeowners will make monthly payments for their mortgage and are under the impression that there aren’t other options. But did you know that paying your mortgage biweekly can reduce the amount of interest you will pay over time?

It’s true! With a biweekly mortgage, instead of making one payment every month, you can pay half and half ever two weeks. For example, if your mortgage is $2,000 per month, you will pay $1,000 every two weeks under a biweekly system.

If you maintain the biweekly payment schedule you’ll end up making an extra month’s payment each year (26 payments per year, which is the equivalent of 13 full monthly payments rather than 12). You’ll also pay less interest because your payments are applied to your principle balance more frequently.

The effects of biweekly mortgages can be dramatic. For example, if you currently have a $150,000 loan at 8 % fixed interest, you will have paid approximately $396,233 at the end of 30 years. However, if you use a biweekly payment system, you would pay $331,859 and have it completely paid off in 21.6 years. You would save $64,374 and pay the loan off 8.4 years earlier!

For many, paying off their mortgage earlier can take a great financial load off their shoulders. Plus they can enjoy more of their income or even use the excess money to for investing.

If you are looking to save money and pay off your mortgage faster, call us at Federal National Funding at 201-342-3300 today to get started with setting up biweekly mortgage payments. One of our associates will be happy to speak to you.