A twist on the standard mortgage in which payments are made every other week, as opposed to the traditional payment schedule of once a month.
Definition from Nolo’s Plain-English Law Dictionary
An unusual home mortgage arrangement in which the borrower makes payments every two weeks instead of once a month. In a biweekly mortgage you make 26 annual payments of half your monthly mortgage amount, thanks to the number of weeks in a year. So under this arrangement you'd make the equivalent of 13 monthly payments each year instead of 12. The good news is the extra payment reduces the principal that you owe -- thus allowing you to pay off a 30-year mortgage in much less time. Then again, you can normally achieve the same effect by simply adding to the amount that you pay on your monthly mortgage.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:27 pm