If you search for "bi-weekly mortgage" with an Internet search engine, you will be overwhelmed by the number of companies offering "Bi-weekly Mortgage Reduction Services" or "Bi-weekly Savings Programs." Beware, you are entering dangerous waters.
Their pitch is that they will make bi-weekly mortgage payments for you.
The real story is that they are not actually making bi-weekly payments on your mortgage. They are making bi-weekly deductions from your bank account. These funds are placed into an account from which your monthly mortgage payment is made (which only takes 24 deductions - but during the course of a year 26 deductions will be made from your account). With the extra 2 deductions, the "Service" makes an additional mortgage payment. In other words rather than making 12 mortgage payments, 13 payments are made.
You may also be able to set automatic payments from your banking account, that will be sent automatically every two weeks toward your mortgage. If this is not possible, call the lender and ask if it is possible to set up automatic
withdrawals from your banking account.
These "Reduction Services" and "Savings Programs" are charging you fees to "make a bi-weekly mortgage payment" for you. The enticement is that they will save you an impressive amount of money on your mortgage and reduce the number of years you pay on your mortgage.
The claim that they are providing a special service to you, that would either not be possible for you to get on your own. The truth is that you can easily make an additional mortgage payment each year. An easy way to do this is to have your mortgage payment automatically deducted from your account each month with an additional 1/12 payment to be applied to the principal amount. At the end of 12 months, you will have made an additional payment. And you won't have to pay any fees to a "Service".
Instead of paying fees for the services of a bi-weekly mortgage program, an equity
acceleration program, or an equity builder program, you can accomplish the same thing on your own for a much lower cost. Many people like to take their tax returns each year and apply that directly towards the principal of your mortgage payment. Depending on how much you get back each year from "Uncle Sam" this can knock off 5, 10, 15, or possibly even more years from your mortgage term. If you make the equivalent of 1 extra mortgage payment per year with your tax return money you can lower your 30 year mortgage down to roughly a 23 year mortgage. If you get back much larger returns than the equivalent of 1 mortgage payment and you apply this towards the principal of your home loan then you can lower your term by much more. This is an excellent way to pay your home mortgage loan off much quicker and to save ten's of thousands and very possibly hundred's of thousands of dollars in mortgage interest.
