The typical mortgage is paid to the lender or provider of the loan every month. The homeowner will typically send a considerable amount of money to the bank which holds their mortgage every month to gradually pay off the debt associated with their property.
Recently, however, an alternative pay scale has been offered by many lending institutions that alters the mortgage plan from monthly payments to bi-weekly payments. Simply put, as oppose to paying your mortgage off per month, this alternative plan allows the individual to pay the same periodic payment in equal halves.
This plan is thought to be beneficial for most people because paying a mortgage off every two weeks typically coincides with an individual’s pay scale. In addition, a bi weekly mortgage precipitates early payments and if executed properly, can lead to the fulfillment of the mortgage six to eight years early. The downside to this plan is that most bi weekly programs are attached with a hefty price tag.
To understand the bi weekly mortgage plan and develop a cost-effective breakdown of the program, one must utilize a bi-weekly mortgage calculator. The bi-weekly mortgage calculator will offer an individual the amount of their principal remaining under both the bi-weekly program and a regular fixed mortgage plan. To view this, all an individual needs to do is enter the principal loan balance, the annual interest rate, and the number of years that their plan was constructed upon.
The bi weekly mortgage calculator will then calculate and show the yearly breakdown of their remaining debt. The principal remaining after each year will be contrasted in a side-by-side format with the bi-weekly payment plan. The user will then be able to freely compare and contrast the opposing plans and decide which one is more cost effective.