Timing Isn’t Everything with Bi-Weekly Mortgages
Many people believe that if you are making bi-weekly mortgage payments and are paying down the principal at a faster rate than if you were making monthly payments, then you will save on interest. If you were to calculate the amount saved at the end of the loan through this method of payment and calculating, the total is actually a significant number and would make a huge difference, if that was how mortgages actually worked. However, mortgages don’t work that way because even if you pay your lender faster, they only calculate the payments once a month, so it makes no difference at all if you pay at a faster rate because it is only credited monthly. This means that even if you sent in a payment on the second week, the next payment your still paying for the interest on the principal prior to the last payment. Drop by First Portland Mortgage for tips on mortgage rates and types.
