What is a Bi-Weekly Mortgage Plan?

by Renee Marie Jordan 12/08/2019


Photo by Designer491 via Shutterstock

The term “bi-weekly” means every other week. If you get paid bi-weekly, you usually get your check every other Friday. When it comes to a mortgage, typical amortization plans (payments of principal and interest) use a 30-year/360-month calculation. But many lenders offer a bi-weekly plan too.

In this case, you would make 26 payments a year. When your paycheck is also bi-weekly, this option works fantastically. When you do this, you effectively make 13 monthly payments in a year. While some lenders won’t accept two half payments mailed to them each month, they will set up automatic deductions bi-weekly for you. 

Can you do it faster?

A bi-weekly plan will pay down your loan more quickly than twelve monthly payments, but can you do more to get your house paid off?

Here are some options to add to your plan and get your mortgage paid off sooner:

  • Round up: If your bi-weekly payment is $762 a month, round it up to $800. That extra $38 against your principle lowers the overall interest you’ll pay. If you can round it up higher, do so.
  • Use your bonus: Annual bonuses from work often go toward holiday gifts and other expenses, but if you really want to pay your house down, add it to your last payment of the year.
  • Use your tax refund: If you get a refund from the government every year for overpaying your taxes, apply it to your house. A few hundred or thousand dollars extra every year makes an enormous difference in the interest you pay and how soon that property belongs to you in full.

Online calculators can help you determine what adding just a small amount to your payment can do to reduce the time it takes to fully amortize your mortgage. Plugin different numbers to see what works for you.

If you haven’t yet purchased your house, your real estate agent can get you started, so give them a call today. Then set your budget, buy your house, and put your plan into action.

About the Author
Author

Renee Marie Jordan

Renee Marie Jordan is a Third Generation Realtor®, who started out her career in residential lending. Jordan Real Estate was established by her grandmother, Jean Kotwitz, who was one of the first female real estate brokers in Solano County! The company was then passed down to her mother, Diane Jordan, over 40 years ago. Renee Marie then took over the company 24 years ago and in 2015 joined forces with RE/MAX Gold. 

Regarded as one of Northern California’s most dependable brokers, Renee Marie has gained industry respect for creating a successful brokerage company. Renee Marie’s unique blend of negotiating expertise, innovative thinking and belief that the client always comes first, has resulted in an extensive client base with many satisfied homeowners. Renee Marie specializes in residential sales, first time buyers, short sale properties, luxury properties, investment properties, foreclosures, 1031 exchanges, and has been the HUD specialist for Solano County since 2009. 

Renee Marie gets to the heart of her clients wants and needs. She attributes a great deal of her success to the many referrals she receives from clients who appreciate the care and thoughtfulness she puts into every transaction. Friends and family members can count on the same excellent service when they are referred to Renee Marie.