Exposed: Bi-Weekly Mortgage Payment Strategy

Oleg Tkach
NMLS #: 90937
Branch Manager
NFM Lending
Company NMLS #2893
Cell Phone: [phone]

I am authorized to conduct business in the state of Washington

[LuisluigiTexas]

I’m glad that somebody explained it the right way finally. Because I was in the impression that if I pay biweekly, my payments were going to be applied biweekly. However, my bank clearly told me that this is not the case and even if I do two payments a month, they’re just going to apply it once a month.I argue with them and I thought I was right but now your video is a confirmation that I was wrong. So what I’m doing now is just sending an additional amount every month that is applied directly towards the principal.

[justbeingme]

Thanks …. You’re the first person to ever break this concept down throughly in an easy to understand way.

[datw]

The BEST youtube video on this subject I've seen in under 5 minutes! GREAT JOB!!!

[WARTHOG]

Best explanation I’ve seen yet, great info that isn’t often exposed!

[bubba]

I get paid bi weekly and I pay my mortgage bi weekly. It takes 3 years off my mortgage by doing this.
I also put 15% extra down every payment, which takes another 3 years off. So a 25 year mortgage is now only a 19 year mortgage.
Not including the double payment I make every 2nd payment. This is all principal, which takes my mortgage down even faster. I plan to pay my $291, 000 mortgage off in under 10years doing this.

[velocityc]

Love what you're doing for the Velocity Banking Community. Keep it up!

[Ada-hjxo]

You did a great job explaining this!!!!

[jerryemt]

Yup, you are correct. It's a racket. You're better off paying extra on the principle each month.

[frances]

You just saved me money on interest you’re awesome thank you

[romansand]

The best way is to make a full mortgage payment to principal only at the beginning of the year. If your monthly mortgage is $1, 200 a month then in the month of January make a one time payment of $1, 200 to the principal. This way every payment you make for the rest of the year benefits.

[heatherloew]

Biweekly payments are a good tool if you are tight on your budget & making 1 large payment for your mortgage per month is causing stress. Say you get paid every other Friday. You can split your monthly payment I half & that amount gets withdrawn from your bank account every other Friday, when you get paid. You know those random months where you get a 3rd paycheck? That would align with a 3rd 1/2 mortgage payment, but it gets applied to your principal. Most people have the misconception that interest is accrued daily like a credit card. That's not the case. Interest is typically calculated on the 1st of the month based on the principal balance owed that day. This amount of interest owed stays the same for the rest of the month & it's paid for when you make your next monthly payment. So if in your bill due on March 1st, you have interest owed in the amount of $300, that amount was calculated on February 1st & you're given the entire month of February to make extra principal payments before interest owed is calculated again on March 1st. This is called paying your interest in arrears. It's confusing unless you've been making your monthly payments for a while or you've actually been in the mortgage industry for work.

[adanhusane]

Great video. I was obsesed with this for a while looking at info. Than i called my mortgage people and they were like, ummm no. And than i was like well just send me info for me to do biweekly. They did. And i saw the fine print. Even if you pay half, they esentialy hold on to that untill you cone up with full amount of payment to apply to monthly due ... i was like damn. Maybe this bank just sucks. But i cane across you and confirmed it. Thanks

[JennySuarez-rvcp]

more videos, please! I just subscribed :)

[brianaspinall]

Great video takes about a minute to get to the real answer.

[naccarati]

Very good video, thank you for your time.

[ColdWarVet]

Well Don, thank you! Case in point. I went to my bank today to talk about home loans. He talked to me about bi-weekly, which I already remembered there was a scam about this. He said if i signed up for bi weekly I'd pay off 4 yrs and a month earlier. That does not agree with this and other videos as well as web blogs saying the 5 -6 years earlier. I would say thats due to what you said, their "bi-weekly" is only applied once a year, where as as you said pay a 1/12 amount every month that counted right away, which I guess then makes the 4 yr to a 5 or 6 early year payoff. I put the question forward, why signup for this when I can just pay it on my own, do I get anything in return for this, answer no. So don't lock yourself into it, if tragedy strikes you may miss a payment and get your house taken from you, do it on your own and you can decide not to make a payment without issue.

[grip]

Accelerated weekly mortgage payments is even better. You can save even more.

[twc]

As you mentioned, I am getting mail from third party vendors advertising payment plans.

[sdguy]

You acknowledge it shaves 6+ years off a 30 year loan, so it is not a scam. Ridiculous to say it is when it accomplishes the exact thing that all say it does, allows someone to pay off their mortgage early

[gittin_funky]

Do we need to tell the mortgage lender that I want the $100 extra to go to the principle (not interest) or does this just automatically happen.