ページ "Should you Switch To Biweekly Mortgage Payments?"
が削除されます。ご確認ください。
Should You Switch to Biweekly Mortgage Payments?
Why use LendingTree?
Most mortgages include monthly payments, but changing to biweekly can decrease how much interest you pay and even assist accelerate the timeline of owning your home outright. However, just making payments every 2 weeks does not guarantee these outcomes - gaining these advantages eventually depends on how your lending institution manages biweekly mortgage payments.
Why make biweekly mortgage payments?
Making biweekly mortgage payments indicates paying half of your month-to-month mortgage payment every 2 weeks. Instead of making one payment every month, you'll overlook the calendar months and pass weeks- 26 half-payments throughout the 52 weeks in a year. It's the equivalent of making one additional regular monthly payment per year, with one little but substantial difference from your other payments: It will be used only to your principal balance, not your interest.
Biweekly payments can trigger more than two monthly payments
Because the months of the year have different lengths, paying "biweekly" means your payments will sometimes show up more frequently than two times a month. On a biweekly schedule, you'll have two calendar months in which you wind up making 3 payments. For the rest of the time, you'll make only 2 payments monthly.
For instance, if you have a 30-year loan with $1,450 month-to-month mortgage payments, you'll pay $17,400 per year toward your mortgage. But if you switch to a biweekly payment schedule, you'll make 26 payments of $725 each, totaling $18,850 each year. The table listed below compares the two payment schedules:
As you can see, you would trim about 5 years from a 30-year loan term and likewise save $53,000 in interest by switching to biweekly payments.
Going with a biweekly payment schedule also means you'll build equity faster. Here are a couple of factors you may wish to construct equity as rapidly as possible:
- To eliminate PMI. If you put down less than 20% on your home, lots of lending institutions require you to pay for personal mortgage insurance coverage (PMI). Once you reach 20% equity, however, you can eliminate PMI and put that cash towards your objectives.
ページ "Should you Switch To Biweekly Mortgage Payments?"
が削除されます。ご確認ください。