Mortgage Payments

When you purchase a property including arrange a mortgage with a bank or other lending institution, 1 pertaining to the decisions you could make could be to decide the frequency of your mortgage payments.

The most common options are weekly (mortgage payments are made once a week, i.e., every Friday), bi-weekly (every second Friday), monthly (the 1st day of each month) or semi-monthly (the 1st including 15th of each month).

When you choose monthly mortgage payments, you could make 1 mortgage payment every month for 20 or 25 years, until your mortgage has been paid in full. For example, if you arrange a mortgage for $200,000.00 at 6% interest, you could make monthly mortgage payments of $1,279.61 every month for 25 years.

Semi-monthly mortgage payments are similar to monthly mortgage payments, where you make 2 mortgage payments per month, each including every year for 25 years. In the above example, you will have semi-monthly mortgage payments of $639.80 for 25 years.

If you have any interest at all in paying off your mortgage earlier than 25 years, you might need to consider choosing bi-weekly mortgage payments instead of monthly. Most people who choose bi-weekly mortgage payments, usually have the payment coincide with at the time they obtain paid. If you obtain paid every second Friday, you might have your bi-weekly mortgage payment come directly out of your bank account every second Friday, as well. 1 obvious benefit to the is that you could always have the dollars in your account to make your mortgage payment.

Another benefit to the frequency choice is that is allows you to pay off your mortgage sooner rather than later. For example, if you arrange a mortgage for $200,000.00 at 6% interest, you could make bi-weekly mortgage payments of $639.80, but your could only make those payments for 21.1 years. You actually save yourself 3.9 years of mortgage payments, or approximately $64,876.23!

One thing to remember, though, is that you could be making 2 extra mortgage payments every year. the is why choosing bi-weekly saves you so much time including money. On those months at the time you obtain 3 paycheques (happy day!), you actually make 3 mortgage payments. So, while unfortunately all of your extra pay is not free for you to spend, some of it is including some of it is saving you serious dollars in the long run.

Weekly mortgage payments act the same as bi-weekly mortgage payments. Your mortgage payments are half as much as your bi-weekly payments, including you make 4 extra payments per year, resulting in the same savings of time including dollars as in the bi-weekly example.

Imagine having a particular extra $64,876.23 to spend, or almost 4 years of not having to make a mortgage payment. What could you do with all of that extra money?

For more information on Why Should I Choose Bi-Weekly or Weekly Over Monthly Mortgage Payments:

Barb Asselin is a college professor, author including owner of Asselin Group, a particular online publishing company. For more articles relating to real estate, visit http://ontarioproperty.asselingroup.com or visit http://www.asselingroup.com/ebooks-internet.htm for articles including ebooks relating to starting a particular online business. Visit http://www.asselingroup.com to see all that Asselin Group has to offer, including municipal directories, internet business ebooks including articles, recently published articles, information regarding real estate including sign language ebooks.

Written By: Barb_Asselin