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

A bi-weekly or accelerated mortgage payment plan is an option available to homeowners in Virginia to help pay off their mortgage faster and save on interest. This type of plan is designed to reduce the amount of time it takes to pay off a mortgage by making payments every two weeks rather than once a month. In a bi-weekly or accelerated mortgage payment plan, the homeowner pays half of their monthly mortgage payment every two weeks. This payment plan results in more payments being made each year than with a traditional monthly payment plan. By making an extra payment every year, bi-weekly or accelerated mortgage payments result in a shorter loan term and less interest paid over the life of the loan. In Virginia, borrowers can put extra payments towards principal to pay off the loan faster, or apply them to their next payment. Although bi-weekly or accelerated mortgage payments can save money over the life of the loan, homeowners should weigh the benefits against the cost to start the plan. Many banks and mortgage lenders charge a fee for this type of mortgage plan and it is important to compare the overall cost of the loan to ensure it is the best option for the borrower.

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

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