Biweekly Mortgage Payments vs. Monthly: Which Gets You Mortgage Free Faster?
ฝัง
- เผยแพร่เมื่อ 25 ก.ค. 2024
- Are you considering biweekly mortgage payments? It is important to understand exactly how a mortgage payment works. Then, you can crunch the numbers to see the results of biweekly mortgage payments vs monthly.
Let’s explore to see if this option is right for you!
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CHAPTERS
0:00 - Intro - Biweekly vs. Monthly
1:02 - Anatomy of a Mortgage Payment
1:55 - How an Amortization Schedule Can Help You Understand More About Payments
4:00 - Biweekly Payments vs. Monthly Payments
7:00 - Considerations to Make Before Switching to Biweekly Payments
#BiweeklyMortgagePayments #BiweeklyvsMonthly #MortgageFree #PaidOffHouse #DebtFreeCommunity #PersonalFinance
OTHER VIDEOS TO WATCH
Recasting Your Mortgage: Pros and Cons: • Recasting Your Mortgag...
How We Paid Off Our Mortgage in 5 Years: • How We Paid Off Our Mo...
Life After the Mortgage is Paid Off: • Life After the Mortgag...
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What do you think of biweekly mortgage payments?
Best video I have seen explaining this mortgage payment method! Thank you so much! 🙏🏼👍🏼😃
Thanks so much Luna! I'm glad it was helpful!
I use a strategy called give all my money to the bank instead of going on vacation 😂. I’ve paid off 9% of my 30 year mortgage this year alone and it’s only July.
Solid strategy!
Sounds good! Thanks for explaining that so simply! 😊
Glad you enjoyed the video!
I do biweekly payments plus $150 extra per payment. It’s great for budgeting as well as knocking down the interest. Thanks for the video!!!
Your plan sounds awesome Ramona! Keep us posted on the paydown process!
Thanks, you made this very easy to understand.
Glad to hear that Jessy!
I pay bimonthly but don't be fooled. The bank takes your money but does not apply the partial payment until the second payment is made. Not sure how banks get away with this but if the partial payments were applied the day they were withdrawn from your account , you'd pay even less interest. Banks are no different than organized crime
Wow... Had no clue... Because car payments aren't like this. Guess it may be better to just go in manually and make extra payments to the principal?
What a shady practices they do! I just noticed that on my statements and was so upset about it. In fact, I called but they were so busy I could not talk to them and said to myself, "In the meantime, look it up, perhaps that is the practice to crew the customer." And unfortunately I found your comment. Grrrr! Thanks though.
My lender required a form to be completed and auto-payment to be set up. If i were to have just paid manually, it would have been as you described. They also required to be one months ahead.
Because YOU, DUMBBELL that you ARE, agreed to MONTHLY payments!!!
by paying by-weekly, you are just making an extra monthly payment per year. This will shave years of your loan, but you can pay monthly and also make an extra payment per year to achieve basically the same result.
Yeah but why not do both! Pay bi weekly and extra payments so your money works even harder for you:)
@@mackredenbarger The whole concept of saving interest by paying off your mortgage faster seems like mind games to me. You're not actually saving money; you're actually spending MORE money but doing it in such a way that you don't notice it.
Here's one reason NOT repay your mortgage early. Let's say I have $50k of principal outstanding on my mortgage. By lending me that money at 3.5%, which is typical for people who bought a home in recent decades, the bank enables me to invest that $50k elsewhere, and most investment vehicles will have a return of greater than 3.5%. If I repay the loan early, my monthly housing payments will end, but I will also lose that $50k, which the bank had been lending me so cheaply, and I'll miss the opportunity to invest that money more profitably elsewhere.
Cool info. Thanks!
Of course!
Great explanation, thanks!
Glad it was helpful!
So I just started paying ahead of time each month plus a little extra and they keep sending me a new statement quicker and quicker which this next one today will be two months ahead. I’m figuring every time I make them recalculate the interest it’s now on a lower amount each time so paying it earlier(if you have it) has to help in the long run. Credit score wise paying early helps too.
I liked the graphs and charts
Great Info got me seriously thinking of going bi weekly
Glad to hear it was helpful!
Great idea, biweekly, increased payment and lumpsum.
It works!
i have Pennymac and they said if i do bi-weekly payment i can't add extra to principal payment but with monthly i can, do you know why i can't add extra principal payment on biweekly? and if so which is better? i plan on adding extra principal whenever i want so which you recommended ?
Thanks!!
Glad it was helpful!
time to do some research.
thanks
Good luck Sean!
nice!
But how I do the by weekly, paying exactly half of the monthly payment, interest and principal?
also intersted.
I prefer no payments. $722K left. But started at $903K in January. Will be at $636K by January. Kind of daunting, but making progress.
That's a big hill to climb! Based on your income, you've got this ...
@@MarriageKidsandMoney Thanks, you guys!
Wow! What do you do for a living? That is Amazing!
@@n0c_n0c lawyer and artist.
Go for it!!!
I pay accelerated weekly payments. And pay an additional 1k per month towards the principle on top of my regular payments.
You'll enjoy that forward thinking in the long run!
But those 2 extra payments you make dontn they incur interest? I was thinking of doing monthly and make 1 extra lump sum payment at the end of the year that would go Right to the principal.
The interest rates are the same regardless of if you pay monthly or biweekly. You are correct. If you make an extra payment directly to the principal, you will get a similar result.
I am thinking the most optimal way might be pay monthly amount + (monthly amount/12 to principal) every month. Maybe breaking it in chunks every month saves in more interest than a lump sum at the end due to "compound interest".
Bro what's even better is pay your regular payment every month take that so called extra month payment divide it by 12 and just pay that directly to your principal that's faster than what he is saying 😮
I used a calculated 72 month loan at 2.9% for $37000. If I pay $1k/mo, that 72 month loan will be paid in 23 months! thanks for the rabbit hole! :)
Anytime! Best of luck to you!
2.9 in this economy?
What is the difference bt paying biweekly and adding a little bit each month to equal an extra payment every year?
I don’t think there is anything wrong with either approach … the more you pay toward the principal and the earlier you do it, the quicker your mortgage disappears
Thank you. I've been adding the equivalent of an extra payment and it projects to save about 5.5 years worth of payments
I get paid on the 25th and mortgage is due the first. How do I pay since I can’t do biweekly
Correct me if I'm wrong, but isn't there more to gain by paying bi-weekly than what the video alludes to? Specifically, if I pay 1/2 my mortgage payment 2 weeks before it's due, the compounded amount is lower for the 2 weeks that follow than it would be otherwise.
Depends on your bank's calculations of the extra funds you send them and how they are applied.
1. How much insterst do you save by paying bi-weekly?
2. Is each bi-weekly payment contain same proportion of interest/principal payment as a monthly payment?
We pay our mortgage weekly (52 payments per year) and our bank charges no fee to do so, however, the weekly payments are made in advance of the monthly due date and held aside by the bank until it is applied to the loan on the monthly due date. The bank calls the weekly payments "unapplied funds" until the sum reaches the sufficient monthly amount. So, are we really saving any money?
Doesn’t sound like it. I’m wondering if it makes sense for me to go bi weekly.
No. The bank is screwing you out of all the savings you should be earning
now do a video on how to scrouge 3000 extra a month when your net monthly income is 3000 thanks
I just set up by biweekly payment. In my letter from my mortgage company it said they would be holding the first biweekly each month until the second one is received and then they would apply i guess to the loan. Is this normal?
Each lender tends to have their own way of doing things. If you feel uncertain about it going to the right place, you could also skip the biweekly payment idea and just manually make extra payments toward your principal each month (or when you have the extra money).
That's what we did. We became mortgage free in less than 5 years doing that. Here's how we did it: th-cam.com/video/nPXXHTMHlxA/w-d-xo.html
I still don't understand. How do you divide $24,000 by 26 and get $1000/fortnight? I get $923.
it's not 24,000.00 it's actually 26,000.00. He's saying the extra $2000.00 goes towards principal.
What’s the point of paying down interest if you’re just going to refinance in a few years unless you have a low payment even then are you only getting money back in 20years that you could buy another house with?
No point
I don’t plan on living in my house longer than 10 years.
What about paying two extra mortgage payments per year written towards interest?
If your goal is to become mortgage-free, you should focus extra payments on the mortgage principal.
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Sounds a lot like Owen Wilson 😂
I've heard that more than once since I started this channel!
I'll take it as a compliment!
Now I can't unhear it ....
You still have to pay home insurance and property taxes 🤣🤣🤣
Very true! You don't want to stop paying either of those for sure.
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