The current housing market has shown that most home values are either stagnant or decreasing.
Equity is gained two ways:
1. Increase in the value of the home.
2. Paying down the principal balance of the mortgage.
Since the value of homes are not increasing in most places, this leaves only one option to build equity in your home…paying down the principal balance.
Have you looked at your amortization schedule lately? Every time you make a regular monthly payment, a very small portion of that payment is applied to your principal balance. No wonder it takes 30 years to pay off a mortgage loan.
With biweekly payments, you accelerate the amount of equity being gained in the home, by applying more to the principal balance.
Here is a comparison of equity position when paying monthly vs. biweekly: Biweekly vs Regular Payments
The faster you build equity in your home, the faster you will be able to eliminate PMI on your mortgage loan.
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