Real estate word of the day is going to be Biweekly mortgage and this what we’re going to do is define the word, use it in a sentence and quickly discuss it.
I’ll define and you use in the word in a sentence. Biweekly mortgage is a mortgage in which you make payments every two weeks instead of once a month. The basic result is that instead of making 12 monthly payments during the year, you make thirteen, the extra payment reduces the principal, substantially reducing the time it takes to pay off a 30 year mortgage.
There you go. That’s perfect. That’s a good there’s like a bunch of more information, lots out and there really is so and then using it in a sentence. You don’t have to pay the lender to set up a biweekly mortgage, you can simply do it on your own by sending in payments every two weeks automatically through your bank.
Mm hmm. I’ve seen that if you do set that up with your lender, that they charge you sometimes for that.
They do. And that’s why I specifically use that. So that was a great point to have to do that. Yes, we like we really, really like when you’re in charge of your own items and you don’t give up that control. So if you’re sending that payment automatically through your bank is maybe a bill payment and you’re setting it up reoccurring, then you could log in just days in advance and modify your schedule.
If something comes up, if you have it, if you give up that control and you have a lender doing it automatically, then you would have to go through and column. And maybe if you establish this and paid some fee to do that for some crazy reason, that all of a sudden you realize you can’t change it quite so easy.
And I don’t like to give up that type of control. It works. So, yeah, it really does. So go ahead and push it instead of allowing them to pull it. And it just is a little bit different, but it should help you out. Now, it depends on what the interest rates are, how much quicker it will pay the loan off.
I’ve seen in different scenarios that if the interest rates when they were like six percent, it was paying it off quicker, like seven years early. And the reason for it is because the interest was higher and more of your payment was going towards interest rather than principle. But now that the interest rates are lower at this moment, it’ll take it won’t save you as much time, but still would obviously help. Yeah, OK.
And those are a good idea to definitely cut down the time because one hundred percent, that extra payment will go towards your principal once you’ve already paid your principal interest, tax and insurance for the month, the extra payment goes there.
Do you need to let them know you’re doing that? You know, in the note that in the notes of your payment
Or possibly I just send money in and they just take a little bit of it is what it is.