Owning your home can see like some distant dream that may never be attained, especially if you are young and just getting into the real estate game. But if you break down this payment-burden, you are going to pleasantly find that this goal is very attainable; and much sooner than you may think. As with most things in life … you need a plan and there IS a strategy that will pay off your mortgage way sooner than those traditional “once a month” payments. Even better, this strategy is going to save you thousands of dollars and it is perfectly legal!! If an accelerated bi-weekly mortgage is a plan that you would like to try, then please read on!!!
You need to understand that an accelerated bi-weekly mortgage is different than semi-monthly payments and it is NOT a magical thing either. Accelerated bi-weekly mortgages have 26 payments per year where semi-monthly payments only have 24 payments per year. Whatever your banking institution or mortgage rate, you can set up to make accelerated bi-weekly payments on your mortgage which, by the end of a 12 month period, actually gives you two extra mortgage payments. The impact on your household budget by making accelerated bi-weekly payments is certainly not like having to save for a lump sum payment once a year (…. which is also a fabulous idea, if you can manage to do it, as an annual lump sum payment goes directly to pau-down the principal. But … I digress ……….).
Here’s the plan! First, you need to divide your monthly payment by two and pay that amount every two weeks. So many of us are paid every two weeks, so for many folks, you will find that this mortgage payment plan is easier to do. The bonus for you in this plan is that you will be making two extra payments per year without having to save for it or impacting your household budget. Secondly, did you also know that this extra payment directly pays down the principal and, of course, the faster you pay down the principal amount borrowed, the faster your mortgage payment will decrease to zero!!!
Check this out! On a mortgage of $250,000 amortized over 25 years with 5 year interest terms of 5%, you’d save over $31,000 and pay your mortgage off nearly 4 years sooner with an accelerated bi-weekly payment schedule as opposed to those traditional monthly payments. Perhaps right now for you, this might seem a long way off, but imagine how amazing it would feel if you were guaranteed to win a loto of $30,000 ! ! Well an accelerated mortgage plan is a sure-fire way to gain $30,000 in YOUR pocket! Again … this is not magic but certainly IS good planning ! !
We all dream of paying off our mortgage as a giant step for our family to enjoy financial freedom. Accelerated bi-weekly payments are one of the best ways to speed-up your goal. Most banks and lending institutions don’t charge fees or penalties for this payment option but it is ALWAYS prudent to make sure you discuss this and completely understand your options BEFORE you sign any paperwork. It’s definitely worth investigating your options — you have nothing to lose; just thousands to gain!
If YOU are thinking of calling this beautiful area home or perhaps want to have your own vacation retreat in Wasaga Beach? Our Brokers, Scott (705-446-6602 Scott@WasagaRealEstate.com or Chad (705-423-9444 or Chad@WasagaRealEstate.com the Campbell Team would feel privileged to help make your Wasaga Dream come true. Contact us today!
Linda Campbell
Marketing Manager for The Campbell Team