The Bi-Weekly concept is a function of making extra payments. Basically, by making 26 bi-weekly payments, you make 13 full payments which equals one extra payment a year. By making one extra payment a year, you can pay your loan of in 22 – 23 years if it is done from the beginning.
The problem is that most Bi-Weekly programs are not administered by your lender but by a third party. Frankly, I would never recommend that you allow a third party be responsible for timely payments on your mortgage but in addition, most third party companies are going to charge you a fee to set up your Bi-Weekly program and they will charge you each time they debit your account.
The good news is, you can accomplish the same thing without paying a fee to anyone by simply taking the amount of your mortgage and dividing it into 12 even payments and make that extra payment each month. In doing this, you will make one extra payment a year. IE: if your mortgage payment is $1,200 per month, you simply pay an extra $100 per month in addition to your regular payment. The extra money will go towards your Principal balance.
As always, call me if you have any questions or concerns at 310-775-9824.
