Biweekly Mortgage

Biweekly mortgage refers to a mortgage in which payment is made every two weeks instead of paying once in a month. As a result, for making twelve monthly payments per year, thirteen payments are made. The thirteenth or the extra payment reduces the principal and time it takes to pay back a thirty year mortgage. There are independent companies that accept bi-weekly payments for thirty year mortgages. They usually charge a set-up fee and transfer fee for each and every payment.

The funds are usually deposited in a trust account from which the monthly payment will be made. In this case, the excess fund remains in the trust account until adequate funds have been accumulated to make the additional payment which will then be paid to reduce the principle. One can also save money by following the same technique by oneself. But at the same time , one should keep the faith in them that your money would be transferred to your account once it is transferred to them.

More terms explained