Both whole sale lenders and the borrowers never prefer a mortgage default as it hurts them in different ways. This is a stressful process as it is, and the last thing you want to do is make it harder for yourself in the long run. This is why some people choose to use a company such as SoFi to help them refinance their mortgage and hopefully prevent a default. Even so, when you see from the perspective of a borrower, he will always want to pay off his mortgage sooner so that he can save his dollars on the accumulated interest rates. He will also want to get a mortgage deal that suits him best, such as a dentist mortgage loan that takes his profession into account.
But for others who cannot refinance or get a specialist mortgage, how will you repay your mortgage loan sooner than the scheduled time? Perhaps most significant for all is the ability to make bi-weekly mortgage payments.
Is it possible to save thousands of dollars by making bi-weekly mortgage payments?
By making bi-weekly payments on the loan, you can repay your loan before time and start owning your home sooner. However, you can only opt for this repayment plan when your mortgage loan agreement doesn’t allow any kind of pre-payment penalty fees for paying off the mortgage loan before time. Nowadays, lenders, similar to this BBVA physician mortgage company offer such mortgage loans so that you can steadily repay the loan by calculating the amount. This can significantly without much possibility of defaulting.
What do you actually mean by a bi-weekly mortgage payment plan?
When you opt for a bi-weekly payment plan, you don’t make any kind of drastic changes to your mortgage loan agreement. What you will be doing is just changing the repayment plan of the home loan so as to be able to save your dollars and also own your home sooner. All that you have to do is to make payments every two weeks. This comes with the benefit that instead of making the normal scheduled 12 payments in a particular month, you can make 26 payments which will end up being equivalent to making 13 regular payments in a particular year. The goal here is that you have to make one full extra payment annually in order to get out of debt sooner.
What are the benefits of making bi-weekly payments on your mortgage loan?
When this option of repaying your home mortgage loan has gained momentum, there must be certain benefits attached to the same. What are they? Read on to know some of the benefits that you may get when you opt for this repayment term.
- Save your dollars: The foremost benefit of paying your mortgage loan at a bi-weekly basis is that you’ll be able to save thousands of your dollars. You actually elect to pay 13 mortgage installments in a year instead of the traditional 12 monthly payments. As there are 52 weeks in a year, this way it is possible to make payments 26 times a year and you can thereby build your net worth faster.
- You can pay off your mortgage sooner: Everyone wants to get rid of secured debt and own his house. So, unless you’re going through dire financial circumstances and your mortgage agreement charges fees on pre-payment, you can certainly choose this option to pay off the loan sooner than the normal amortization schedule. You can not only pay back earlier but also save dollars on the accumulated interest rates throughout the term of the loan.
Therefore, when you’re wondering about the ways in which you can pre-pay your mortgage loan, you can certainly choose this option. Use a mortgage calculator to check the savings ratio and take a better and an informed decision.