Bi-weekly payment

Bi-weekly payment:

Bi-weekly payments refer to how often you make a payment towards your mortgage loan. On a typical 30 year loan you are required to make, and your payment is calculated off of, 360 payments, or a payment a month for 30 years.  With 52 weeks in the year, bi-weekly payments will mean 26 payments through the course of the year instead of the traditional 12 monthly mortgage payments.

These payments are half the amount of the typical monthly payment that would be associated with the same loan, the difference is you will inadvertently make an addition payment each year on your home loan, and doing so will reduce the term of the loan significantly.

This is an attractive feature.  However, it is important that you try to work with a lender that will apply your payment immediately(when you send it in)  as opposed to monthly.  Immediate application means the principle balance of your mortgage will be paid down faster because the subsequent payments will have less and less interest accrued to be paid.    If the payment made is accrued monthly  by the lender,  the balance will not be reduced as quickly, but you will still accomplish lowering the balance.  Either way this feature will reduce the term of your loan.  Identifying which lenders accrue on bi-weekly schedules as opposed to monthly schedules is something a mortgage specialist can help you with.