What is a bi-weekly or accelerated mortgage payment plan?

A bi-weekly or accelerated mortgage payment plan is a way of paying off a home loan in Pennsylvania with more frequent payments than the typical monthly payment schedule. This type of mortgage payment plan is beneficial for borrowers because it can reduce the amount of interest paid over the life of the loan. Under a bi-weekly mortgage payment plan, payments are made every two weeks rather than one per month. Over the course of the year, this type of payment plan actually creates 13 payments instead of the standard 12. This extra payment per year can make a difference in the amount of interest paid over the life of the loan. The accelerated mortgage payment plan works similarly to the bi-weekly plan, but here the borrower makes full payments each month plus an additional full payment. For example, if the monthly mortgage payment is $1,000, then the borrower would make a $2,000 payment every two months. That extra payment per year adds up and can help the borrower end their loan sooner and pay less interest. Mortgage laws in Pennsylvania are different from those in other states, so it is important to check with a mortgage specialist in the state to make sure that the bi-weekly or accelerated mortgage payment plan is an option. In some cases, borrowers may even be able to make extra payments at any time throughout the loan term.

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What is a bi-weekly or accelerated mortgage payment plan?

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