Refinanced the mortgage from 5.875% to 5.0% and kept the years (I call it momentum) that we were at, 27. An interesting concept came flooding back in my mind from finance courses, bi-weekly payments. Essentially, you end up making an extra payment on your mortgage if you make payment every other week (or weekly) because of how weeks vary by month.
Example: make 1/2 payment every other week ends up being 26 payments, or 13 full payments and thus 1 extra payment a year.
Why I am not sold? Well this is just forcing you to make an extra payment on your mortgage which any one can do at anytime, this is just a structured way of doing so. Why not take that extra payment and invest it in the stock market and earn (theoretically/hopefully) higher returns than what you would save with the mortgage interest rate?
Photo Source: http://www.flickr.com/photos/library_of_congress/2178246751/
0 comments:
Post a Comment