Myth: Bi-Weekly Mortgage Payments! #firsttimehomebuyer #fha #homeloans #fhaloans

One trendy hack you may have heard of is to make bi weekly mortgage payments. Now people will tell you set it up on autopay, have the payment come out every two weeks, and by the end of the year you'll make a 13th payment instead of just 12. And that extra payment will go straight to principal. Well, that's not quite the case. Let's say you have a thousand dollar a month normal mortgage payment. You're paying an extra $200. So 1200 bucks a month. The whole idea is the extra 200 goes to principal. But what really happens unless you announce it, is they'll hold that extra $200 a month. So after five months you've got an extra thousand that covers an extra mortgage payment. But they sp thousand between principal and interest, so maybe not even half of it's going to principal, which is where you want it. What you have to do, call the bank, call the servicer and ask for a principal reduction payment with that extra 200amonth to make sure all of your money is going to your mortgage.