If I pay my mortgage twice a month - monthly payment/2 - would it bring down number of years I would be paying from 30 to 20 or 25?
2006-07-25 12:01:19 · 7 answers · asked by curious 1 in Business & Finance ➔ Renting & Real Estate
No, paying your mortgage in two payments every month will not pay your mortgage down any faster.
HOWEVER, paying 1/2 your payment every two weeks will.
Let me explain, If you pay 1/2 your payment on the 1st, and the other half on the 15th of every month your still only making 12 full payments per year.
But, if you make a 1/2 payment every other week (a.k.a. bi-weekly payments) you'd end up making 26 half payments per year (52 weeks/year) or 13 full payments. With most lenders that 13th payment gets applied directly to the principal.
On a 30 year loan you could shave about 6 years or so off your mortgage term with bi-weekly payments.
2006-07-25 12:21:58 · answer #1 · answered by ReggieWjr1 4 · 2⤊ 0⤋
yes. if you were to pay even 2 extra payments per year. 2 full payments, you could cut a 30 yr loan down to about 17-18 years. saving you at least 100k in finance charges. 2 payments per month would get you around 14-15 years on a 30 yr loan. good job, keep it up. make sue you want to live in that house though before you start all of this.
2006-07-25 12:07:53 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Smart person-
yes if you pay your PITI or PI depending on payment structure bi-weekly than you can beat the bank and pay off the loan. Remember is you stick to a standard 30 year fix and run the loan to the term you just paid the loan twice over. So to beat the bank from taking alot of money this is a good avenue. I do tell this to my clients who can afford it and want a 15 year fix. I just tell them to get a 30 and pay it every two weeks same thing. If they get into financial trouble for some reason than its easier to pay the 30 year fix than the 15 year.
30 year if you pay bi-weekly and remember one time you will pay the house off in 7-10 years depending on if you stick to the program.
Hope this helps and good luck and tell me how it works for you in 7 years.
2006-07-25 12:08:03 · answer #3 · answered by Openthathouse.com 4 · 0⤊ 0⤋
Well yes it will. But so will overpaying your now monthly note, as the extra is applied to the principle.
Remember that semi-monthly and every two weeks are VERY different! 24 vs. 26 times a year.
2006-07-25 12:05:58 · answer #4 · answered by DJ 7 · 0⤊ 0⤋
a true bi weekly payment 13 full paymnes vs 12, will cut your time from 30 years to 22 yrs 7 mos or so. your lender can give you a amoritization schedule
2006-07-25 13:01:28 · answer #5 · answered by daniel r 4 · 0⤊ 0⤋
I don't think by half. However it does cut back. So check with a mortgage loan offier and have the #'s . The faster you pay off your mortgage the faster you can play and retire more and enjoy your life!
2006-07-25 12:06:13 · answer #6 · answered by melvin m 3 · 0⤊ 0⤋
You can plug in the numbers and see for yourself if you like. There are a lot of calculators available online. One that I know of is at http://www.nosharkzone.com/biweeklycalc.html but there are also others.
Best wishes.
2006-07-25 19:03:45 · answer #7 · answered by K M 3 · 0⤊ 0⤋