Biweekly Payments on Your Home Will Save You Money

Over the life of the mortgage loan on your home, you will pay an exorbitant amount in interest. Consider taking advantage of biweekly payments on your home, and you will save money. Making biweekly payments on your home will reduce your total interest cost and reduce the term of your loan.

There may be 12 months in a year, but there are 26 total two-week periods. If you are making biweekly payments you are essentially making 13 payments per calendar year. If you are buying a new home in the Alamo area and begin taking advantage of biweekly mortgage payments from the start of your loan, you can reduce a 30-year fixed rate mortgage by nearly five years.

How Much Can You Save?

If you were to take out a $200,000 mortgage at a 5% interest rate on a 30-year fixed-rate mortgage and make biweekly payments, you can save $34,000 in interest payments and reduce the term of your loan by nearly five years.

Many lenders are willing to collect payment from your account on a biweekly basis. If you choose to go that route, be sure to inquire with your lender to see if they charge a one-time setup fee. Be sure to check and see if your lender will allow you to pay off your loan early without incurring any fees. If making a biweekly payment is not an option for you but you are able to save throughout the year, making an extra payment each year will essentially yield you almost the same results.

Take advantage of low interest rates and save even more money on your Alamo home mortgage. If you are ready to sell or buy a home, contact me by email or call me, Brad Gothberg, at (925) 648-5326. I have been a real estate professional for 23 years, and my qualifications include the production of over $105 million in sales within the past 5 years.