Should you pay a bi-weekly payment on your mortgage ?
A lot of my clients ask me if it would be a good idea to make a bi weekly payment.
Please do not pay anyone extra money for this service. You can do this yourself in a few different methods. As a lot of you know, making a biweekly payment is the same as paying 1/12 of your monthly mortgage payment each month or paying one extra payment each year .
But is it a good idea ?
There is no right or wrong answer, but there is an argument to consider putting this money away into your retirement plan instead. For example, if you are in an average 25% tax bracket, if you put $4000 annually into your retirement or 401k .
Since this is a tax deferred investment, it would save you $2000 in actual taxes you pay that year. So just something to weigh the pros and cons.
Here is an interesting article by Ric Edelman on this subject.