Shave Years Off Your Mortgage

It's Not Free, But There's Sense To Taking A Faster Payment Plan

By Jennifer Openshaw of WFN.com Financial Network for Women

Question: "My mortgage company offers a plan to pay off our mortgage sooner with biweekly instead of monthly payments. The idea is to pay half the mortgage every other week, thereby increasing our equity.

"However, since I get paid every other week, wouldn't I be accomplishing the same thing by making my monthly payment every four weeks?"

--John Korbar, Kingston, N.Y.

Answer: If you switch to making your payment every two weeks, regardless of when you get paid, you can build up more equity in your home. The more frequent payments reduce your balance more quickly.

But heed this advice from Signature Mortgage at www.signature-mtg.com: If you plan to sell your home within five years, you won't really save much with a biweekly loan. In fact, you can actually accomplish the same by making an extra monthly payment at the end of each year, as long as your lender allows you to do it without penalty.

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