Monday, December 17, 2012 - Article by: Joe LaVallie - HomeStreet Bank -
Do Bi-Weekly payments work? Yes they do and they are a good choice for some people. If you want a defined plan that obligates you to a Bi-Weekly payment plan sign up with your mortgage lender or a third party provider. If you want a more flexible plan that works just as well, consider a self-managed plan.
The bi-weekly mortgage payment plan consists of making one half your normal mortgage payment every two weeks and that adds up to 13 regular mortgage payments per year.
The extra payment will go directly to the principal balance of your loan. By making additional payments to your mortgage you will pay off your loan sooner. With today's interest rates, you will save approximately 4 years of mortgage payments by using this method.
If you don't want to enroll in a formal plan; simply add 1/12th of your regular mortgage payment to each mortgage payment. This self-managed approach will produce the same results as traditional bi-weekly payment program.
The self-managed program is voluntary and can be managed by yourself with no modifications necessary to a formal plan. You will be able to skip a month during the holidays or double your extra payment anytime during the year.
Some banks charge for the bi-weekly payment plan while the self-managed plan is always free.
Welcome to winter time in the Northwest.
The Integrity Team
22001 66th Ave W
Mountlake Terrace WA 98043
1-800-761-7788 ext 7604
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