Bi-Weekly Mortgage Programs

Imagine paying your mortgage once every two weeks to pay it down quicker. Better yet, imagine a more desirable scenario- your mortgage is being paid bi-weekly by a company that has advertised a special service for mortgage reduction or a savings program.

Is there such a thing as a company that will pay your home loan bi-weekly in a manner that will help you and give you a more advantageous financial picture?

The straight up answer to this is no. There is no fairy godmother to wave her magic wand, nor is there a magic potion. If you are paying a mortgage then you have to pay it. It is as simple as that. There are no exceptions. If a company professes to be willing to make bi-weekly payments on your home loan for you they are not telling you the whole truth.

Let us take a closer look at what these companies are actually doing instead. The company will deduct money from your bank account on a bi-weekly basis. They will then take this money and put it into an account that is the one from which your mortgage payments come from. Your mortgage payments will then be withdrawn by your financial institution once a month. Instead of the standard 24 deductions in a calendar year, the so-called “mortgage reduction service” will deduct the money 26 times.

What happens with the money that is deducted two more times a year? The company then takes that money and makes another mortgage payment. To put it another way, as a homeowner you then will made 13 payments on your home annually instead of 12.

The worst part about these services is that while they claim to save you money, they are charging you exorbitant fees for the supposed help they are providing to you. Their claim that they will save you money in the long term and that you will pay your mortgage off faster is supposed to make you forget that in the short term you are paying out plenty of your hard earned money to them. In truth they are not helping you at all.

These services try to tell consumers that the only way to make an extra home loan payment in the course of a year is to go through them. This is completely false. If you wish to do this you can make appropriate arrangements with your financial institution. One method of doing this is as follows- Set up automatic withdrawals for your mortgage payments on a monthly basis and ask that an extra 1/12 payment be added to the principal of the loan monthly. By the time a year has passed you will see that you have made the extra payment without the need to look to any type of reduction service or program.

There are other ways that you can make an extra mortgage payment. For example if you have a sizable tax return on its way to you then use this money to lower the principal of your mortgage. This can make a great deal of difference in how long it will take you to pay off your mortgage.

Even if your tax return funds are only enough to make one extra payment annually, if you do this year after year you can knock a 30 year mortgage down to approximately 23 years! This can also save you a lot of money in interest charges.

When you see ads proclaiming to help you reduce your mortgage because of a special service or program, run the other way! Look to more responsible and cost saving ways of bringing down the amount you are paying on your mortgage. Do not let yourself be fooled! Be smart and wise about your money. Learn how you can save money on your home mortgage without costing you money.