Financial experts have all kinds of tips and tricks for helping consumers manage their money better. When it comes to paying off a mortgage, it is said that paying a smaller payment twice a month can help pay off the mortgage much faster than a traditional monthly schedule.
A bi-weekly payment essentially means that you are paying a mortgage payment twice a month. With 52 weeks in the year that makes a total of 26 payments, compared to the traditional 12 payments made on a traditional schedule. A bi-weekly payment schedule allows you to squeeze in an additional two over double payments per year; the equivalent of one extra payment per year.
Why is this helpful? The main idea behind a bi-weekly mortgage payment is to pay off the mortgage quicker. Not only will the total mortgage balance get paid much faster, but the amount of money going towards the principal amount owed on the loan will increase quickly. For some people who have a hard time managing their monthly payments, a bi-weekly schedule can keep them out of mortgage debt. By having them pay when their bi-weekly paychecks arrive, many people find it easier to keep up with a smaller more frequent payment in their budget.