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Bi-Weekly or Bi-Weekly AcceleratedBi-weekly Payments (Also sometimes called bi-weekly accelerated payments) are made every second week, usually on the Friday of every 2nd week.
This means that you make 26 equal payments as opposed to 24. There will be two months in the year that you will make three payments in the month.
What this means is that in effect you are making an extra monthly payment. This extra payment goes down on your principal, which results in your mortgage getting paid off about three years sooner than if you opted for one of the other payment options.
Paying your mortgage off sooner will save you thousands on interest over the amortization of your mortgage.
Like with the other payment options, the bi-weekly payments include principal and interest repayment. If you opted for your financial institution to pay the property taxes for you, your payment will also include a monthly portion set aside for property taxes.
The alternative to the bank deducting your property taxes is to enroll in your city’s TIPP Program.
With the TIPP Program, the City will deduct 12 equal payments from your bank account to cover your annual property taxes, much the same way that your financial institution would do it.
The benefit of the TIPP program is, that if you decide to change financial institution, you won't have concerns about transferring the property tax portion to a new financial institution. The City will continue to make the necessary monthly deductions toward your annual property tax.
Make sure that you understand other payment options before deciding on a bi-weekly payment plan for your mortgage.
If you would like to speak to one of our professionals before making a decision, please
contact us for a free, no obligation consultation.
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