Once you purchase a new home, your mortgage is a big monthly payment. Do you ever wish you could split that up into more manageable amounts? The way the payments are structured, if you make one extra monthly payment every year, this helps you save on interest over the long haul.
These are just a few benefits of biweekly payments. Rocket Mortgage is the place to start for those who want to enroll in biweekly mortgage payments.
Customized Biweekly Plans
Many people are paid every two weeks. Traditional payment plans have you paying your mortgage once a month. But unexpected, and sometimes costly, things happen in life: additional bills, surprise car repairs, or even an unplanned emergency room visit. Even with those folks who know how to establish good budgeting habits, it’s not always easy.
It can be tough to watch that payment disappear from your account every month. With biweekly payments, they become smaller and easier to plan. You get paid and you can plan for part of the check to go toward the mortgage.
This also may be helpful for those on a fixed income and don’t want to deal with a huge payment every month. The smaller payments can be easier to handle.
Free and Simple
Other companies charge a fee to accept your payments biweekly. Some charge hundreds of dollars. Setting up biweekly payments through Rocket Mortgage is completely free. There are no extra fees involved.
Since we handle the whole process, payment changes are also addressed efficiently. If you have escrow changes due to fluctuations in taxes and insurance, we’ll make sure you’re never overpaying or underpaying your mortgage payment.
Extra Payment Gets You Ahead
When you make your mortgage payment, you’re required to make it every month or 12 payments a year. When you switch to making a payment every two weeks, there’s one really cool advantage.
Since there are 52 weeks per year, that makes for 26 biweekly payments. If you divide that again, you see that it equals 13 monthly payments. In effect, you’re making one extra monthly mortgage payment every year by making the switch.
Just how much money does that save? Let’s take a look.
If you have a $200,000 loan amount on a 30-year fixed-rate mortgage at a 4.25% interest rate, your monthly payment would be $983.88. By making one extra payment on a yearly basis, you’re cutting 53 months of the loan – that’s over four years! By paying it off faster, you’re saving $25,763.48 in interest.
Want to try out your own scenario? Check out our amortization calculator. If you have a mortgage with us, use this calculator to take a look at how the extra monthly payment affects your loan. The faster you get rid of your mortgage payment, the faster that money can go toward travel, retirement, your child’s college fund. You’re limited by only your imagination.
Getting Set Up Is Easy
You can sign up for biweekly payments on Rocket Mortgage at any time. It’s important to note that you have to be one month ahead in your payments before starting on the biweekly program. Once you’re set up with the program, Quicken Loans applies the payments to your loan on a monthly basis.
For example, if your monthly mortgage payment is $1,000 and its due January 1. Once you satisfy your January payment, to set up biweekly half your payment will be due prior to February 14th. Every 14 days following half a mortgage payment will be drawn.
Sign up for biweekly payments through Rocket Mortgage today! What would you do with all of the money you’re saving on interest? Share your plans in the comments section below. Got questions? Contact a Home Loan Expert today!
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