Pros and Cons of a Bi-weekly Mortgage Payment | Is this for you?

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Pros of a Bi-weekly Mortgage Payment:
Faster Loan Payoff: By making bi-weekly payments, you end up making one extra payment each year, which accelerates the loan repayment process. This results in a quicker payoff and reduces the overall term of your mortgage, allowing you to own your home free and clear sooner.
Interest Savings: Since interest on a mortgage is calculated on the outstanding balance, making more frequent payments reduces the principal balance faster, ultimately leading to a decrease in the total interest paid over the life of the loan. This can save you thousands of dollars in interest payments.
Budgeting and Cash Flow: Bi-weekly payments can be easier to manage for some homeowners as they align with the typical two-week pay cycle. This can help individuals budget more effectively and maintain better control of their cash flow.
Cons of a Bi-weekly Mortgage Payment:
Less Flexibility: With bi-weekly payments, you are committed to making a payment every two weeks instead of once a month, which could be a disadvantage for those with irregular income streams or who prefer more flexibility in their payment schedule.
Administrative Hassle: Not all mortgage lenders offer bi-weekly payment options, and those that do may charge additional fees for enrollment or processing. Additionally, you may need to set up a separate account or arrange automatic payments, which could be an added hassle for some homeowners.
Opportunity Cost: By making extra payments towards your mortgage, you might be missing out on other investment opportunities with potentially higher returns. Homeowners should carefully consider their financial goals and weigh the benefits of paying off their mortgage faster against the potential gains from investing in other assets.
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Опубликовано:

17 окт 2024

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Комментарии : 36

@JefftheMortgagePro Год назад

Is a bi-weekly mortgage payment right for you? Let's discuss: calendly.com/jeff-trevarthen/15-min-call

@MattSamson83 5 дней назад

I like being in Australia because here the banks quote a minimum monthly repayment, but there is in most cases on a variable interest rate loan no penalty to making extra payments. So a person can go bi-weekly of their own accord as long as they pay the minimum per month.

@JefftheMortgagePro 4 дня назад

I've heard it's different there.

@Eplics 28 дней назад

Say I had a 4000 dollar car payment should I pay bi weekly 2000 or every week which would be 1000 is it better to do quarter monthly cause the total do the loan would be less making the interest per day less

@JefftheMortgagePro 28 дней назад

Great question. I'm not sure of the answer. Probably, weekly or biweekly, which would have the same effect.

@lecf08 25 дней назад

For the extra payment you end up doing, would you notify the bank that you want to direct the payment to the principal or just keep paying what's ahead (principal+interest)?

@JefftheMortgagePro 25 дней назад

Yes, you can notify the bank, but it's not necessary unless you're doing a recast of $10k or more.

@NickGore 5 месяцев назад

Do you have to notify the bank or arrange anything with them or can you just start making bi-weekly payments on your existing 30-year mortgage that you've been paying monthly on?

@JefftheMortgagePro 5 месяцев назад

I would notify the bank.

@mandypdx 5 месяцев назад

My lender required a form and automatic payment, plus having my payments a month ahead. They would not apply partial payments had i just started doing it manually.

@sidneysfamily8760 7 месяцев назад

Is there better day of the week to pay your mortgage? I am setting up biweekly payments and I can choose which day of the week. Thank you

@JefftheMortgagePro 7 месяцев назад

Great question! I'm not sure which day works the best.

@jorgezuni2818 7 месяцев назад

Is there a Delinquency cut-off day . In that month ?

@JefftheMortgagePro 7 месяцев назад

@jorgezuni2818 not sure what you're asking?

@jorgezuni2818 7 месяцев назад

I owe about 80,000 of mortgage to finalize the total payment. I’m not planing to pay it off , reason. Is I’m still far from Retirment so I need to have a write-off .. so I’m choose. Biweekly with advantage of 13 payment done yearly .

@JefftheMortgagePro 7 месяцев назад

Excellent!

@blkfld7850 4 месяца назад

My plan is to pay it bi-weekly as I'm paid bi-weekly anyway. But additionally I'll pay an addtional $200 per month to principal as well as 2 additional payments per year as I have 2 months where I get 3 checks In a month. Thus taking a 30 year note down to 13 years. At least I hope thats how it works lol

@JefftheMortgagePro 4 месяца назад

Nice work!

@CandycaneBeyond 9 месяцев назад

Why not just put $$ on the principal each month?

@JefftheMortgagePro 9 месяцев назад

You could do that too. 😉

@JG-yr9tk 8 месяцев назад

What do you mean?

@isaacsmith3901 7 месяцев назад

If you don’t tell your bank to apply extra payments to the principal they may just hold your payment til the next payment due date. By telling them to apply it to the principal they won’t hold payment…. That’s my understanding.

@raemaxey3401 5 месяцев назад

I set mines up before I made my first mortgage payment. I had to call and have them send the paperwork and I mailed it back. I don’t do a bi-weekly mortgage plan (4.5% interest rate) but I do have my mortgage payment set up on automatic payments on the 1st and 15th and that includes an extra 100 dollars to go toward principal. It doesn’t bother me because it comes out before I see the money and I know in the end it will benefit me. Another goal is to start walking more extra payment’s into the bank to pay on my principal as well.

@JefftheMortgagePro 5 месяцев назад

Nice work!

@raemaxey3401 5 месяцев назад

@@JefftheMortgagePro Thank you

@sharonstockham5786 Месяц назад

doesn’t that extra biweekly payment pay the mortgage company more interest in that payment??

@JefftheMortgagePro Месяц назад

For the first 10 years or so, yes. After that, mostly principal.

@Motivate_and_Meditate 4 месяца назад

Thank you, I'm very interested in this going to look more into it.

@JefftheMortgagePro 4 месяца назад

👍

@tatianaflorez7858 Месяц назад

I;d make that extra payment up front or divide it across several months.

@JefftheMortgagePro Месяц назад

Good idea!

@sv991311 11 месяцев назад

Great vid

@JefftheMortgagePro 11 месяцев назад

Thanks!

@Jcauto-t4r 3 месяца назад

The benefits outweigh the cons.. it just that “some months” have less weeks thus by you paying every 2 weeks you will be outpacing those months resulting in more money paid yearly. Bottom line it is better that way, most of people get paid by-weekly anyways. DO IT.

@lindembergl 4 месяца назад

This last thing you said, makes no sense. It’s the same amount of money split in two payments. How this can be different then pay once a month. It’s the same amount but split in two. The start might be a little difficult because you will meet a extra week payment. Remember, for the following months and years will no make any difference.

@JefftheMortgagePro 4 месяца назад

Bi weekly is different than semi-monthly. If you pay bi weekly, you'll have 1 extra payment per year.