Once you purchase a home, you may be thinking to yourself: How can I pay off my loan quicker?
One strategy for doing this is making payments every other week instead of monthly (half of your monthly mortgage payment twice a month). Ideally, this would help you pay off the loan faster and bring down how much you pay in interest over the life of the loan.
There are certain things you should check to make sure these payments are actually doing what you hope they are, however.
Homeowners should check with their lender to see if such a payment option is available, if there are associated penalties and that the payments are directed toward the principal balance every month. Also, check cautiously with third parties that offer such a strategy because there may be associated fees and holds on the payments. If payments are processed when they are received on a biweekly basis, then the principal of the loan may be reduced quicker than it would with a monthly payment.
If biweekly payments are done correctly, in addition to paying down your loan amount quicker, you may be able to build up equity faster and get rid of private mortgage insurance sooner. In certain circumstances, it may also help make personal budgeting easier as well.
If you have any questions about getting a home loan in the Roseville area, or simply want to speak to someone about making mortgage payments every other week instead of monthly in order to speed up your loan payoff date, don’t hesitate to contact one of our loan professionals.