Lenders charge you interest for money they loan you over time. In most instrances, such loans are "amortized" which means that a part of each payment you make is applied to pay interest to the lender and the rest is applied towards reducing your actual debt or principal.
Typically, you can expect to pay mostly interest during the early part of the loan and mostly principal during the later part. Voluntarily adding more towards your principal earlier than scheduled results in a significant reduction in the amount of interest you pay over the course of the loan.
BiWeekly mortgage programs simply provide a systematic way to accelerate your payments towards principal so that you do not pay as much interest.
BiWeekly programs vary slightly between service providers. Generally, such service providers make arrangements with the client/mortgagor to make automatic withdrawals from a checking or savings account every other week. This withdrawal schedule results in 26 half-payments over the course of a year instead of 12 full payments.
In short, two extra half-payments that are collected every six months. The entire amount of these payments are applied towards the loan's principal and the client/mortgagor no longer pays interest on that money.
However, since the payments are "fixed" (or not variable) each subsequent payment made incrementally reduces the loan's principal.
The result of the cumulative effect of all of the extra half-payments and the tiny extra payments to principal throughout the course of the entire program is that most loans are paid off many years--or thousands of dollars--earlier than sceduled.
Yes. Not only can you use our biweekly program with your mortgage, but you can apply it to virtually any large loan on which you wish to systematically accelerate payments. This includes, land contracts, boat loans, automobile liens, RV or motor home loans, and even business loans.
Frankly, you might not need it if you are disciplined enough to put in place and audit such a system for yourself. Almost all of us know that we should eat better, excercise more, and floss our teeth daily, but very few people do so. This system provides a proven, systematic way to reduce your overall debt profile over the years without over taxing your will power or pocketbook.
When you save interest, you cut your bank's profits. Their goal is to have you pay them interest for as long as possible. Whereas your goal is the opposite--to pay them as little overall interest as possible.
No. This program will work with your existing loan or mortgage. However, if you happen to be buying or refinancing your home, it is likely that you may get our biweekly program for free by using one of our mortgage or banking affiliates who offer this program for your purchase or refinance. Though they are certainly not required to do so, many of our professional affiliates--mortgage brokers, Realtors, builders and financial planners--cover the enrollment cost for their clients. You may just ask them if they are affiliated with us or ask them to become so.
My Broke Brother-in-Law Says BiWeekly Programs are Scams...Are They?
We've heard the same thing from a handful of people, yet our business increases annually. The essence of the skeptics' complaints seem to revolve around the fact that there's nothing that we offer that a person could not do for themselves. Except for having professional auditing and funds tracking, most disciplined borrowers can accelerate their own payments. The root question is "Will they?"
Can a Professional such as Myself Market this Program to My Clients?
Yes, we have a terrific affiliate program with several different levels of participation. You can choose the one that's right for you and for your clients.
Enrolling in our biweekly program simply involves completing and mailing to us an application with original signatures, providing us a voided check for the account from which you wish to make your biweekly payments, completing a Patroit Act Disclosure and paying your enrollment fee.
Yes, we have several discount programs available to users who are members of special groups including veterans, teachers, policeman, fireman, and certain other professionals. You may also benefit by enrolling with somebody else at the same time using our "Buddy Program". Some of our affiliates offer to cover the entire cost of this biweekly program if you use their services.
