by JA Harned

Created on: May 11, 2008   Last Updated: May 15, 2008

Bi-weekly mortgage is a relatively new product to the industry, and some mortgage comes still don't offer them,
the mortgages, have a lot of benefits, with in the long run paying less interest and paying off early, but they also have a down side, some mortgage companies charge fees to get one started, and pre payment penalty on paying your mortgage off early.

So lets see how benefical it is to you!

Let's take a look at how the bi-weekly mortgage works!
I ran my mortgage on the bi-weekly calculator
Loan Amount Years to go Interest Rate current payment Total Interest Pd
67,000 27 4.10%, $ 584.00 $ 49,545
That is my trusty VA Loan right.

Now if I paid it off with the bi-weekly:
24.4 Years Equiv. interest rate of 3.40% $ 292.00 $ 39,908 Savings $ 9,637

If you pay an additional $25 to every payment
20.4 Equiv. interest rate of 2.90% $ 317.00 $ 33,391 savings $ 16,154

If you pay an additional $50 to your bi weekly payment
17.7 Years Equiv. interest rate: 2.57% $ 342.00 $ 29,135 savings $ 20,410

On one website I visited www.bwma.com
They have a plan for bi-weekly mortgages and how to save you money on fees no out of pocket expense for setting one up,
others is $395.00 or more to set one up. Bonus for automatic draft from your account "$1.00 back on each $3.95 electronic debit fee for 20 years", when you have an extra payment your money goes automatically on to the principle, it is not held towards the next months payments.
So I visited my mortgage company GMAC, the only type of loans listed was balloon, interest only. arm, and conventional, as I said the product isn't in use with every mortgage company so you will have to shop around to find someone who does them. Wells Fargo also has no information on their website on bi-weekly mortgages.
The larger the mortgage the bigger the savings for you, if you are a disciplined person you can try to send extra on each monthly payment. Take your monthly payment mine is 584.00 divide by 12 extra 48.66 each month I would pay to pay an extra payment each year. Now when you do this put a little note either on the check or in the envelope if you mail out that the extra goes on the principle which would reduce your interest that you are paying out to them.
Make sure their is no pre payment penalty.
Call your mortgage company and make sure it is applied to the principle of the loan.
Put your bonus check or refund check on the principle and knock your payment down even more, while your paying extra on your mortgage. The bi-weekly mortgage can help you pay off your mortgage an average of 7 years earlier, but if you put down your refund, or company bonus, inheritance on the mortgage you can pay it off even faster by having it applied to the principle of the loan.
If you want to do a bi-weekly with out the sign up, make your regular payment first and then start paying the following week the bi-weekly so they don't charge you late fees.

you can go to www.bankrate.com which explains a lot about the bi-weekly and has a calculator.
www.about.com for more information
Check out the www.bwma.com organization for bi-weekly mortgages.

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