What Are My Payment Frequency Options?
These are the payment frequency options available to you with most lenders:
- Bi-Weekly Accelerated
- Weekly Accelerated
Which Option Should I Choose?
Some people like to have their mortgage payments come out right after they’re paid by their employer. Different employers have different pay periods and you can have your mortgage payment date match your pay period. What payment frequency you choose comes down to your personal preference.
We can arrange for payments to come out on specific days of the month.
If you want to pay your mortgage off faster you can choose Accelerated payments.
Advantages of Accelerated Payments
Bi-Weekly Accelerated payments are calculated by taking half of the Monthly payment amount and paying it every 2 weeks. After one year has passed you will have made an additional one month's payment. Example:
If your monthly payment is $1000 per month, your Accelerated bi-weekly payment would be $500 every 2 weeks:
$500 X 26 (every 2 weeks) = $13K after one year.
Paying the $1000 monthly would result in paying less at the end of the year:
$1000 X 12 (every month) = $12K after one year.
As you can see, accelerated payments are just one way of paying your mortgage off faster.
Paying Your Mortgage off Faster
In addition to choosing accelerated payments to pay your mortgage off faster, you can also take advantage of your prepayment privileges.
When you make extra payments towards your mortgage it goes directly towards the mortgage principal (not the interest). And thus, each time you do this, your remaining amortization decreases.