A mortgage in which you make
payments every two weeks instead of once a month. The basic result is that
instead of making twelve monthly payments during the year, you make thirteen.
The extra payment reduces the principal, substantially reducing the time it
takes to pay off a thirty year mortgage. Note: there are
independent companies that encourage you to set up bi-weekly payment schedules
with them on your thirty year mortgage. They charge a set-up fee and a transfer
fee for every payment. Your funds are deposited into a trust account from which
your monthly payment is then made, and the excess funds then remain in the
trust account until enough has accrued to make the additional payment which
will then be paid to reduce your principle. You could save money by doing the
same thing yourself, plus you have to have faith that once you transfer money
to them that they will actually transfer your funds to your lender.
