Mortgage Payments: Monthly or Biweekly?

Question

Hello,

My wife and I officially closed on our first home/investment property in August and are getting ready to start making our mortgage payments on the house. We are house hacking this home and plan to live in one side of the duplex for roughly 1-2 years and then looking to move out and rent both sides.  My question is, since this is going to be a rental property for us in the long term, is it better to make our mortgage payments monthly or biweekly? I understand that biweekly gives you one extra principle-only payment a year, but if we are looking to save money for our next home, is it better to save that money for a down payment or is it more beneficial to get that one extra payment a year?

Thanks,

Shane

Gregory Saysset · Answer

I agree with Chris Seveney, but if I could add to that.

If it was my rental, I would also do the same and keep the extra money, I will keep 3 to 6 months of property expenses (including Loan/tax/insurance) and once there, I will keep the money to invest in your next down payment. I will recommend doing a long-term plan and investing that money. Let's say you want to get to 5 properties, each time I will do the same save for those 3 to 6 months' expenses backup and again save for the next house. I will consider paying off the loan once I get to those 5 houses using the debt snowball.

Chris Seveney · Answer

personal preference, I would rather keep that money aside and liquid in case of rainy day fund before paying down the mortgage by one payment a year