If you want to pay off your
home loans in Auburn, WA you may want to consider making bi-weekly
payments.
Generally,
people pay their mortgage dues once a month. But if you’ve done some research
about how to pay off home loans in Auburn at a faster rate, you’ve probably
come across information about bi-weekly payment plans; a third party vendor
offers to automate payments for you every two weeks so you can knock off your
interest and pay off your home loans faster.
The
problem is that most of these payment plans require some kind of additional
payment to the vendor. Or, if they don’t, the third party likely holds onto
your first two weeks’ payment (so it can accrue interest) until they receive
your second payment, and then they make one lump sum payment to your lender.
Which, to your lender, looks exactly the same as it would if you were paying in
full each month.
What’s
the point? To be frank, there’s not much of one. But bi-weekly mortgage
payments are actually a very smart idea. You just shouldn’t
go through a third party if you want to get the most bang for your
buck.
When
you pay your mortgage once a month, you make 12 payments a year. If you paid it
twice a month, you’d made 24 payments a year. If you pay it bi-weekly, though,
you make 26 payments a year. By dividing your monthly mortgage dues in half,
then budgeting to put that money towards your mortgage bi-weekly, you’ll make
two extra payments per year without feeling an additional financial burden!