• Mortgages pay-off earlier with bi-weekly mortgage payments.house image by qadro from Fotolia.com
  
  Homeowners cringe when they see the amount of interest due on a 30-year mortgage. For every $1,000 borrowed for 30 years at 5.5 percent interest, the homeowner pays $1044.04 in interest alone over the 30 years. Paying extra to the principle of the loan on a regular basis can save the homeowner thousands of dollars in interest. Rounding up the payment on a $250,000, 30-year loan at 5.5 percent interest from $1419.47 to $1,500 saves $37,525.82 in interest and reduces the loan by more than two years.
  
  

Matches Your Pay Cycle

• True bi-weekly payment plans pay half of the mortgage payment every other week. Homeowners with bi-weekly pay cycles may find this arrangement convenient. It eliminates the need to pay the entire payment out of one paycheck, or the need to set aside a certain amount for the mortgage each pay period. Avoid programs that simply collect the money bi-weekly and make the payments monthly.
  
  

Automatic Payments

• Many companies offer automatic payment withdrawal to facilitate the bi-weekly payments. When this is set up correctly, the bank will draft the funds directly from your account and apply them to your mortgage on the same day. Ensure your lender approves or is affiliated with the bi-weekly payment administrator. Many homeowners have lost months of mortgage payments because they didn't verify the company with their lender.
  
  

Reduces Interest Owed

• Bi-weekly mortgage payments generate 13 full payments each year, since 26 half payments are made. Making this one extra payment a year reduces a 30-year mortgage by six to eight years. The $250,000 loan, for 30 years at 5.5 percent interest paid bi-weekly shortens the loan period from 30 years, to about 24. This scenario saves $53,659.48 of interest over the life of the loan. Sign up at the beginning of the loan for maximum value.