As of December 19, 2017, MyQL is now referred to as Rocket Mortgage.
Do you know an easy way home buyers can save thousands of dollars in interest on their mortgage? I’ve have two words – biweekly payments.
Quicken Loans and most major mortgage providers offer biweekly payment programs that help pay off your mortgage faster with half payments twice a month. Traditional payment schedules require you to pay your mortgage once a month. But one benefit of the biweekly payment program is that it amounts to one extra payment every year toward the principal balance on your loan.
Since there are 52 weeks per year, that equals 26 biweekly payments. If you break that down, you see that it actually amounts to 13 monthly payments. Thus, you’re making one extra monthly mortgage payment every year with biweekly payments.
Clients in the home loan process can easily sign up for the program by speaking with their Home Loan Expert. There’s no additional paperwork and signing up takes only a few minutes by phone. If your loan has already closed, you can sign up through MyQL.com or over the phone.
“I think a lot of people under-utilize the biweekly payment option mostly because they don’t think about the added benefits they can get,” said Bryan Kimbrell, product manager in Capital Markets at Quicken Loans. “For many clients, it can shave four years off of your repayment program, which can save a ton in interest.”
Clients can choose a day between the 1st and 14th of the month to start their biweekly payments. Plus, you can select a start day that aligns with your pay schedule. Every 14 days following, half of a mortgage payment will be withdrawn from your bank account.
Let’s say your mortgage payment is due January 1 and you sign up for the program in January. Once you satisfy your January payment, your biweekly payments would begin prior to February 14.
“We wanted to pay twice a month because the smaller payments were more manageable. Plus, I preferred that my payment be withdrawn when we get paid,” explained Chris Singleton, of Grand Rapids, Michigan. He has used biweekly payments for a couple of years. “I didn’t want to worry about sending out a check every month and I love that I don’t have to think about it.”
If you want to run your numbers to see how much you can save, use our amortization calculator. Here’s a comparison of biweekly and traditional mortgage payments:
It’s important to note a client’s payment is the same amount whether they make monthly or biweekly payments, said Crissy Gutierriez, marketing strategy specialist for Quicken Loans.
“I’ve had a lot of clients tell me that payment service fees can cost about $2 or $6 per transaction with other companies,” she said. “And clients need to know that our biweekly payment program is completely free!”
“Making two payments is getting us to our goal of paying off our home quicker,” said Singleton. “I really don’t know why we didn’t’ sign up sooner than we did!”
Kimbrell foresees the payment program growing as home loan experts work to make clients more aware of the option.
“In the past, the biweekly payment option has only been available to clients we service,” said Kimbrell. “But we hope that more people will sign up since we’ll be promoting it sooner to new clients.”
Ready to sign up? If you’re already using a biweekly payment program, tell us below how it works for you.
If so, subscribe now for tips on home, money, and life delivered straight to your inbox.