The biweekly mortgage has been around for years but with the recent media attention to the real estate industry in general and the mortgage industry in particular, the biweekly has been getting thousands of home owners to use this simple, yet powerful, way to speed up the principal payment process. Why is this so popular? How does it work? How can I do this?

Here is why this is so popular to hundreds of thousands homeowners. It is an easy and effective way to increase the equity in a home. It can also shorten the life of the mortgage substantially. It does this with just about the same mortgage payment that one usually makes per month so it is affordable to anyone who owns a home. The biggest obstacle is just doing it.

Biweekly means that the homeowner will make a payment every two months instead of once per month. Basically what you do is take your monthly payment, cut it in half and then make that payment every two weeks. So how does this save money? Well, by paying every two weeks you will actually end up paying more off the principal every year because:

1. There are 52 weeks in a year.

2. That means you make 26 payments a year.

3. With the monthly payments you would make the equivalent of 24 payments a year.

4. The 2 payments extra would go towards your principal.

5. This accelerates the payment of the loan and each month the principal gets paid by an ever increasing rate.

The great thing about this is because each month is only a few days over 28 days ( 4 weeks) the biweekly mortgage payments are not a hardship on any home owners. The most extra days in a month are 3 and some months have 0 or just 1 extra day.

So why wouldnt everyone just do this? I think much of it has to do with either they dont know about it or they think I can just pay extra off my principal anytime I want. Why pay biweekly?

But the problem is that a large percentage of people dont ever make any extra payments to their principal. They think about it but dont do it. There is always other more important things to use the money for, even though the actual money they need every month to make a big difference is quite low.

Discipline is a key factor here. If someone has enough discipline it really isnt necessary to use a biweekly mortgage plan. This doesnt mean that people who dont use a biweekly arent disciplined. Only those who want to pay down their mortgage principal but never seem to be able. So, in a way the biweekly is just a formula to help homeowners, who are usually very busy with other parts of there life, become more disciplined and make them pay off the mortgage principal more quickly. With todays prices, a homeowner can save over $50,000 and cut 5 years off the life of the mortgage!

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Copyright 2005 By Tim Phelan