As a home owner who has just bought his home, you would definitely like to pay off your mortgage as soon as possible. And it would be a delight if you find a mortgage plan that can help you to fulfill this dream. Biweekly mortgage plans allow you to pay one half payments every week instead of a full one payment per month. Therefore the borrower makes thirteen mortgage payments every year rather than the traditional twelve payments thereby accelerating the mortgage pay off time by eight years on a 30-years mortgage plan depending on the interest rate.

In current market conditions of low interest rates, biweekly mortgage payment plan is considered as a feasible option to pay off mortgage quickly. But should you sign up for a plan committing you to make additional payments on your mortgage? Therefore it is important to have a complete understanding of your options before making any final decision.

A biweekly mortgage plan aims to cut short the amortization period of your mortgage plan. Instead of making a full payment every month you are committed to make a payment every second week which adds up to thirteen annual payments.

This is the only plan that allows you to make thirteen payments on your mortgage on annual basis. Also you have to pay a certain amount of interest rate on annual basis which will also be included in the twelve payments. The thirteenth payment will be included in your principal balance i.e. the amount that you owe the bank. This is how the biweekly payment plan works; with every thirteenth payment the sum of your loan amount is reduced.

Biweekly payment plans are useful indeed, but home buyers should also consider the cons of getting into the biweekly payment plan.

You need to make sure that the extra amount you are paying is adding in the principal amount of your loan.  Also do not forget to include tax and insurance amount in your biweekly payment.  Choosing a plan that will help you to pay off your loan as early as possible is obviously a smart move.

If you are considering to get into a biweekly payment plan or you need any further assistance you can call us and schedule an appointment with our professionals today.

Contact us: info@avonfinancial.com
Ph:905-216-5563

 

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