mortgages and loans

Many lenders will offer the biweekly payment plan to their borrowers. All you have to do is call the lender’s customer service department—even after the closing—and request a change in payment plan.
If the lender does not provide for a biweekly payment plan, you can accomplish these same results by merely paying an extra monthly payment each year.
However, mortgage loan borrowers should generally avoid any biweekly plans offered by an outside, independent service. There are companies who will set-up a biweekly payment plan for homeowners. But they are unnecessary, expensive and dangerous.
These biweekly service companies are unnecessary because they simply set up a payment plan by which the borrower pays an extra monthly payment each year. This is a payment plan that borrowers can set up themselves.
These companies normally operate by first obtaining a two-month deposit (sometimes more) from the borrower. The borrower then makes biweekly payment to the company. The company, however, simply makes monthly payment to the lender—with an extra month’s payment each year.
Meanwhile, the service company will usually charge the borrower an application and maintenance fee (in addition to the deposit) and reap the interest earnings from the deposit accounts.
They are also very risky because if the company goes under—as many have already done—participating borrowers can lose all of their deposits and throws their mortgage payments (and credit record) into confusion.

A Biweekly payment plan, when available and affordable, is a highly recommended option that all homeowners should consider. This loan repayment strategy can save the borrower thousands of dollars, shorten the mortgage term and more quickly increase available equity.
The key element of the biweekly plan is that the borrower essentially pays an additional monthly payment every year. This additional payment is prepayment toward principal; it is not an advanced monthly (Principal & Interest) payment that was regularly scheduled.
With the biweekly plan, instead of one monthly payment, the borrower will pay half (1/2) of a monthly payment every two weeks. Of course, there are more than four weeks every month. Since there are 52 weeks in a year, the borrower ends up paying 13 months of payments each year—resulting in an additional full monthly payment every year:
● 1/2 of a regular monthly payment every 2 weeks.
● 52 weeks in a year.
● 26 biweekly payments (52 / 2) in a year.
● 26 biweekly payments equal 13 monthly payments (26/2 = 13).
This prepayment results in a marked decrease of the loan term, as demonstrated below. This prepayment also means that the borrower will pay much less in interest charges and will be increasing the equity in his or her home more quickly.