Is there a method to lower principal balance on mortgages?

If you pay every other week or every week, does this help? I do not have a lot of extra money to put towards this monthly payment of $2700 so if I split it up will it lower principal faster? What is the correct way to do this?Is there a method to lower principal balance on mortgages?
Bi-weekly mortgages are mathematically effective. However, they also more than double your chances for a LATE PAYMENT and a credit hit. Just apply 1/12 of a normal principle and interest payment each month to your normal payment and you accomplish exactly the same thing - plus you have the option of doubling up or skipping additional contributions on any given month as your finances dictate.





Finally, you are NEVER EVER going to hold the SAME mortgage on the SAME property for 30 years, never mind the 25 or so years bi-weekly payments will reduce that figure to.





Normal payments with occasional principle contributions are ultimately more realistic. Try to think in terms of 10 year chunks. 30 year numbers LOOK cool but are not going to happen in this day an age. I DO NOT RECOMMEND these options very often.Is there a method to lower principal balance on mortgages?
Bi-weekly payments do reduce your principal faster that paying once a month.





Bi weekly payments are based on the concept that there are 26 bi-weekly periods in a year. So if you make 26 bi-weekly payments, it's the equivalent of paying 13 monthly payments a year (one extra monthly payment per year).





Few lenders will accept a half payment every other week, so to get around this do the following:





$2700 monthly payment x 13 months = $35,100.00


$35,100 / 12 =$2925





This means that paying $1350 bi weekly is the same as paying $2925 once a month.





I do NOT agree with refinancing into a 15 year mortgage since it will obligate you to a higher payment. Since you don't have a lot of extra cash, this will strain your monthly budget and may cause mortgage lates on your credit score. It's better to only be obligated to $2700 monthly and pay extra when you can, rather than being obligated to a payment that's likely to be as much as $1000 more per month
You may be able to set up biweekly payments with your mortgage company. This would have you paying an extra payment every year, going directly to your principal (don't pay a service charge). Otherwise, just pay a little extra each month. Your payment coupons should have a box to check (overage applied directly to principal).
it might lower your principal a little bit faster, since the balance is outstanding for a shorter time. the difference will be almost negligible, though.
Making bi-weekly is one of the simplest and an effective method of cutting years off your mortgage.





Many people get paid every 2 weeks (bi-weekly) BUT if youa re paid every 2 weeks there are 26 payperiods thus is you pay 1/2 every 2 weeks after a year you have made 13 payments instead of 12. It may not seem (esp early in the mortgage) that it is making a big differene but it does. Its even better if you can slip even just a little bit more in each payment.
While you could try that, most lenders will not accept those payments. What you should do is refiance and obtain a 15 year mortgage.
The best and simplest way is to simply add 1/12th of your payment to your monthly check.





It has almost all the benefit of a bi-weekly plan, and possibly more since most bi-weekly plans charge you money upfront and every two weeks ($5-7 every time they pull money out).





And, it can be stopped and started at any time, unlike biweekly plans. No risk of overdrafting if they try to pull money out and you haven't been paid yet.





Paying 1 extra payment per year, which is all the biweekly programs actually do, will pay most loans off in about 22 years instead of 30. Pay normally, and you'll still owe about 50% of your original balance after those same 22 years. Scary, but true.





So pay extra every time you can. Every dollar you pay extra, means that dollar won't have interest charged next month, or the next 200 months. It adds up fast.
Talking to your lender about a bi--weekly mortgage is a good thing. That is the easiest way to pay down the principal without having to try and save for it. doing that allows for 1 extra payment to be made per year while will reduce the overall amount of time it takes to repay the mortgage.





One thing about the bi-weekly mortgage payments is that some banks will not accept it and other banks will charge you to set the payments up in this way. Remember, you are now making twice as many payments as the bank expected. They have twice as much work to do processing these payments.





You can also include additional amounts in your monthly payments as well. If when you pay your mortgage you see that you have an extra few hundred dollars in the bank add it in to the mortgage payment.





Whichever way you go, remember to put a note in the memo section of the check stating something like ';$XXX is to be used for extra principal payment only'; Some banks will take the extra cash and use it to pay down the interest first and not the payment. if you state how the extra money is to be used on the check, the bank must use it for that purpose.