Lions Realty Group
Taunee English, Lions Realty Group
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Why It Pays to Pay Your Mortgage Twice a Month

by Taunee English 07/07/2020

Photo by cottonbro from Pexels

We all know how hard the beginning of the month can be; it seems like there are a million bills due all at the same time, and one of those bills is usually the most expensive among them all—your mortgage. After you budget for all of your expenses, that gigantic payment can really make a big impact on your bank account. That's just one reason why some homeowners choose to pay their mortgage in halves twice a month, rather than monthly as a whole.

Paying Your Mortgage Differently Than Traditional Monthly Payments

You might be able to choose to pay your mortgage bi-weekly or semi-monthly. Generally speaking, these are the same thing. However, a few days' difference here and there actually means that you would make 26 payments throughout the year if you paid bi-weekly, which is the same as 13 months' worth of payments. Semi-monthly payments would be paid twice a month, which comes out to 12 months' payments at the end of the year. Both are beneficial for several reasons, but obviously, you'll be paying a whole extra month if you pay bi-weekly, which can really cause the savings to add up over the life of a loan.

The difference comes in the timing in which your payments would be due. If you're paid on the 15th and last day of the month, bi-weekly payments can be tricky because there will be two times a year in which your payment will be due before your paycheck arrives. However, you can still opt for semi-monthly payments that get paid in accordance with your pay schedule.

The Benefits of Paying Your Mortgage Twice a Month

Let's start with the obvious benefit: you'll spread one amount of money across two payments. That means you'll have more money leftover during the initial payment date than usual and you can put that extra cash toward principle or put it in a savings account until the next payment's due so it can collect a little interest. Not only that, but because there's less time between payments, there will be less interest since interest is calculated at a daily rate. Since each payment will push a little more money toward principle, you'll actually end up paying your mortgage off faster than you would if you paid monthly in most cases. Be sure to check your loan documents to verify that you don't have a pre-payment penalty before you put this plan into place!

Before you commit to (or keep going with) monthly payments on your mortgage, stop and think about the benefits you could gain from splitting your payments in half. This is a great way to spread out the cost of one of your biggest expenses while simultaneously ensuring you're chipping away at your principle. 

About the Author
Author

Taunee English

TAUNEE is

2019 Beverly Hills/Los Angeles REALTOR of the YEAR!

Taunee English is third-year award winning Real Estate Broker of Lions Realty Group, a ResiMercial Boutique Brokerage serving Greater Los Angeles and the 2019 winner of Los Angeles Real Estate Agency Award!

She is an U.S Navy Veteran, and she is as devoted to entrepreneurship and professional development as she is to our country. Taunee serves as Chair of Professional Development Committee at Beverly Hills/Greater Los Angeles Association of Realtors and also serves as a State Director, California Association of Realtors.

Taunee English is strong supporter of Women In Leadership and is one of the founding members of Metro L.A./Beverly Hills Women's Council of REALTORS®.

And most of all she devoted daughter to her parents - a mother that she plays Twinsie with fashion photo shoots at least three times a year and a father who has the onset of Alzheimer which prompted Taunee to obtain her certificate in Fiduciary Management from UC Riverside and to further her work with families in establishing trusts and avoiding probate.