All Western Mortgage www.awmlending.com Difference Between Regular and Biweekly Mortgage Payment Plans
Monthly Mortgage Payment A typical mortgage repayment plan expects you to make one mortgage payment each month, which is equal to 12 payments per year. If you have a fixed rate mortgage for 30 years, it would take 360 payments to repay the loan in full. Mortgage installments are always split into 2 parts - the principal and the interest. The principal portion reduces the amount owed to the lender and the interest portion covers your cost of borrowing. In the initial years of the mortgage, the majority portion of your monthly installments covers the interest and just an insignificant portion goes towards the balance. This is the reason why even after 5-8 years, the balance of your loan barely gets reduced.
The Biweekly Mortgage Payment A bi-weekly mortgage payment plan short circuits your loan’s amortization schedule. Under the bi-weekly plan, you make mortgage payments every couple of weeks instead of making one payment per month. When you add this up, it amounts to 13 installments a year. This additional 13th payment covers your principal balance of the loan and this is how the biweekly mortgage payments work. With each additional payment your loan balance gets reduced by the amount of the payment and that’s how you shorten the term of your loan along with saving big bucks on the interest. In simpler terms, bi-weekly payments allow you to save thousands of dollars on interest and reduce your loan term by 4-6 years.
If you want to find out how much money exactly you’ll save on your mortgage by switching to a biweekly payment plan, you can use All Western Mortgage’s biweekly mortgage calculatorhere. Apart from the bi weekly mortgage calculator, All Western Mortgage has developed various other state of the art and easy-to-use calculators that will help you plan your mortgage budget better. Check them out today!
All Western mortgage Address: 8345 W Sunset Rd, Suit 380 Las Vegas, NV 89113. Phone: 702-850-2790 Fax:702-906-0153 Email: firstname.lastname@example.org