By always having the same amount going toward your mortgage from each paycheck you won’t have to worry about balancing between your two paychecks. If you are paid biweekly, then having a biweekly mortgage payment can make it easier to budget.
By making an extra payment each year, you’ll gain equity more quickly. The more you’ve paid toward your mortgage, the more equity in your house you own. There are a few ways to build equity faster and one of them is making additional mortgage payments. Equity is your financial stake in your home. One of the reasons why homeownership is so attractive to so many people is that it allows you to build equity. Assuming a 6.5% interest rate and biweekly payments of $252, you would pay off your mortgage in a little over 24 years, or about six years early. But if you make biweekly mortgage payments, you will be making what equates to 13 monthly payments each year. With a 30-year mortgage, it will normally take you 30 years to pay this off. Lets consider the pros and cons of entering a biweekly mortgage plan.īy making one extra payment a year, your mortgage will ultimately be paid off faster.įor example, if you’re buying a $100,000 home and you put 20% down, you’ll have an $80,000 mortgage. You’ll need to weigh all the factors before deciding whether to commit to biweekly mortgage payments. Consider working with a financial advisor as you manage your mortgage obligations. However, there are some drawbacks to this method. It can be a good option for those wanting to contribute more money toward a mortgage, without having to commit a large amount of money.
With biweekly mortgage payments, you make 26 half-payments a year, which equates to 13 total payments in a year. One option to consider is a biweekly (every two week) payment plan. When you have a mortgage, at some point you may decide to try and pay it off early. I'm an Advisor Find an Advisor Search Email FacebookTwitterMenu burgerClose thinBiweekly Mortgage Payments: Pros and Cons - SmartAssetUpdated on December 16, 2022Written by Elizabeth StapletonShare
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