To "Bi" Or Not To "Bi" : That's A Good Question Should You Be Making Biweekly Payments?

To "Bi" or not to "Bi": That's A Good Question - Should You Be Making Biweekly Payments?

You've heard about them. You may even do them. But is a biweekly mortgage payment plan the best choice to pay off your mortgage early and gain equity on your home faster? Well, the answer is both yes and no. Like most things in life, it all depends on how you look at it.

Yes, of course, more is better - payments that is. Making biweekly payments is equivalent to making thirteen full payments per year rather than twelve. Not sure?...Fifty two weeks divided by 2 (biweekly) is 26. So, you'd have 26 half payments which comes out to 13 full payments per year. Depending on the particulars of your loan, this can take roughly up to 7 years off of your 30 year mortgage term! Great! Yes, that is great.

So, what could be better than this? Well, nothing really unless you are quite good at self-discipline. You see, to set up the biweekly payment plan costs you money. Generally, in the ball park of $150-$200. Not much really if you weigh the expense relative to other loan expenses. And well worth it to reduce your mortgage term and save thousands! However, if you are self-disciplined about your finances and want to get the same results, why not just make an extra payment each year on your own and forgo paying someone else to set up the biweekly system? Or, you could take your mortgage payment and divide it by 12 and tack on the extra each time you make your once-per-month payment. Sounds easy. But let's be honest. Will you actually do it?

If you have this kind of discipline with your finances and you've got the extra funds to cover it, by all means, put the extra money down on your own! If you're like most of us, however, pay the small fee to get the biweekly plan set up. It will save you money over the life of the loan, provide the discipline for you, and give you peace of mind with the results you desire.

Jenna Berlin is a broker for and co-owner of Colorado Capital Lending, located in the beautiful Rocky Mountains of Colorado. Serving the mortgage industry for 13 years, Colorado Capital Lending specializes in both residential and national commercial loans.

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