Bi Weekly Mortgage Payments - Save Thousands Through A Calculator

Im sure youve found plenty of companies willing to sell their biweekly mortgage payment plans to you.

Some companies are even advertising Free biweekly mortgage programs. Sounds like a good deal right? Not quite.

These Free biweekly mortgage programs always end up being more expensive. If you read the fine print, youll notice these Free plans charge a transaction fee.

The fees are usually $3.50 per transaction, two times per month.. At twice a month that equals $7.00. Which means youll pay $84 every year or $1,800 over the life of your loan. Not so Free after all.

Implementing a biweekly mortgage plan is very easy to do. Dont let anyone tell you its worth paying a service to do it for you.

This report will take you step-by-step and show you how easy it is to implement your own biweekly plan without using an expensive service. Allowing you to be in complete control of your mortgage investment.

The following bullet points show the valuable benefits a bi-weekly plan will bring you.

Did you know that after paying 15 years on a 30-year mortgage, you still owe 90% of the amount that was borrowed?

So many people are surprised when they make a call to their lender after paying for a few years and find out how much they still owe. I think most people believe they have a lot more equity built up in their loans than they really do.

So keep this in mind as a goal to overcome as you read on. Dont get discouraged. You may want to read this over a couple of times to fully understand how it works.

Making bi-weekly payments on your loan is one way of achieving faster equity build up, reducing interest payments and reducing your term. If youre unfamiliar with biweekly mortgage payments, let me explain. Its actually quite simple.

First off, bi-weekly means every two weeks. However, dont think youre going to make a full monthly payment every two weeks. You actually pay half of your monthly payment every two weeks. In doing so you create one extra, full monthly payment per year.

Youll need to get a calendar at this point, it will help understand. Take your calendar and make a mark on every other Friday for one full year. Count the marks. You should have 26 total. These marks would essentially be your payment dates.

As you can see there are two months out of the year that have three payment dates instead of just two.

If you pay half of your monthly payment every two weeks, that means you are making 26 half payments per year. So 26 half payments are equal to 13 full payments.

Normally you would only make 12 full payments per year. That is how the magical 13th payment is created. The secret is in those two months where there is an extra Friday. So really, you hardly feel that you are coming up with an extra payment because its spread out over the course of a year.

lets say you borrowed $100,000 at 7% interest for 30 years. Your monthly payment would be $665.00 (without taxes and insurance.) So you decide after taking out this loan that you would really like to pay this loan off early and build extra equity in your home.

All you do is take your monthly payment of $665.00 and cut it in half, which would be $332.50. If you pay $332.50 every other Friday you will have one extra payment of $665.00 at the end of the year.

You would then forward this payment to your lender with a letter designating this money to be applied entirely towards principal.

This small amount of work would yield a savings of $34,700.00 and allow you to pay this 30-year loan off in 23 years. Or, you could have cashed in on the equity at 18 years and had about $25,000.00 for your childs college fund.

The first thing youll want to do is take a look at your most recent loan statement. This will provide you with the most up-to-date information about your loan.

Next, you will want to call your lender and ask for the cash management department. If they do not have such a department, then ask for someone that can help with payment inquiries.

Once you are speaking to the proper person, inform them that you wish to start making bi-weekly payments on your loan. Ask that person what options are available to you that would enable you to set up a bi-weekly payment plan.

Let them know that you are trying to implement your own bi-weekly mortgage plan and you would appreciate assistance in offering a plan that could help.

They should have the capability to automatically withdraw half of your monthly payment every other Friday from either your checking or savings account. This is the easiest way to implement this plan. Utilize your banks auto debit service.

If they can indeed do this, make sure you tell them that any extra payment that will be accumulated is to be applied directly to principal and not to be held in any other way. This is very important, as you dont want them to place this money in escrow for taxes and insurance.

Be sure and write down this persons name and direct phone number for future reference in case of any problems. Make sure that your new payment plan show up on your monthly statements. This will allow you to keep track of your progress.

Since this is the easiest way to do this, you will probably incur a small per transaction fee, which is totally fair, seeing as how they will be working a little harder every month to accomplish this. However, dont let them talk you into paying any type of outrageous enrollment fee. If they insist that you pay an expensive fee or they do not have the ability to draft your account on a bi-weekly basis, then you will have to take another route.

Dont be discouraged if your lender cant do this for you. There are alternatives. One way to accomplish the same goal is by doing the following:

Open a checking account dedicated to this plan. Then, every other Friday you will deposit half of your loan payment in this checking account. Once a month, pay your mortgage from this account just like you normally would. Either send a check or have your lender automatically debit the account for the monthly amount.

Sounds like nothing has changed, right? Remember the two months of the year that have three Friday payments? Well, by depositing half the amount of your monthly payment every other Friday in this account, you will still make regular monthly payments, but you will also accumulate one extra payment at the end of the year.

Now all you need to do is write a simple letter (see sample letter at the end of this report) and send the extra payment in with this letter.

And there you have it. A simulated bi-weekly mortgage payment plan, accomplished all on your own.

One advantage to this method is that you gain interest while the money is in your checking account and you dont have to worry about paying any transaction fees.

If you dont have the willpower to stick with this plan, just remember the savings it will bring. Treat this plan as an investment: an investment that is virtually risk free, and one that you are in complete control of.

Use our free biweekly calculator and grab more tips for implementing your own biweekly payment plan at http://www.equityfast.com

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