Mortgage and Refinancing Information Channel:

We would like to thank the local libraries, schools, and universities for recommending students to visit us when doing research on any of our information topics.
 Please check back frequently as new topics are added and current topics are updated daily.

Are Biweekly Mortgages Really Worthwhile?

You may have heard people, especially mortgage lenders, extolling the virtues of biweekly payments, saying that you can save thousands of dollars and take 5-7 years off your mortgage--and then offering to set up a biweekly plan for you for as little as $400. But you don't have to spend $400 to begin saving money and time on your mortgage. In fact, you don't have to spend anything at all! You can set up a money-saving mortgage payment plan yourself--easily and at no extra cost.

The key is to look carefully at the fine print in many biweekly plans. You find that even though you'd be making biweekly payments, the lender may only post them to your account on a monthly basis, which means that you wouldn't be saving anything on interest, because mortgage interest is paid in arrears (as opposed to rent payments, which are paid in advance). Your only real savings would be in the fact that you'd be making the equivalent of one extra payment a year. That's a good thing, of course, but you don't need to pay someone $400-500, possible monthly maintenance fees, to be able to accomplish the same results.

Here's how biweekly payments save time and money: By making biweekly payments, you actually end up making an extra monthly payment each year. Over the course of a year, you'd make 26 payments (one every other week for 52 weeks), which is the same as making 13 monthly payments. Making one extra payment per year will shorten the life of your loan and save you thousands of dollars.

But you don't have to make biweekly payments to obtain those savings. Here are a couple examples of how you can save big money, using the same basic idea:

If you get paid every two weeks, divide your monthly principal and interest payment in half and then send your lender a check for that amount during those months in which you receive three paychecks. Just sending in those two extra checks will be the equivalent of one extra payment a year.

If you don't want to send lump checks, you can get the same results by dividing your monthly principal and interest payment by twelve and then adding that extra amount to your payment every month. Normally, that figure won't put too much extra strain on your budget, and it will add an extra mortgage payment to your loan every year.

You really can save significant amounts of money and shorten the life of your loan by making extra payments, but you definitely don't have to pay a lender $400-500 to do it. Making those extra payments is easy to do yourself, and at no extra charge--which is always a good thing.

Copyright © 2005 Jeanette J. Fisher All rights reserved.

Professor Jeanette Fisher is the author of "Doghouse to Dollhouse for Dollars," "Credit Help! Get the Credit You Need to Buy Real Estate," and other books. Real estate financing questions? Visit the new Real Estate Credit Help Center for articles, Credit Tips ezine, and blog: http://www.recredithelp.com

MORE RESOURCES

used office furnishings-supplies-equipment-desks-cubicles-service-counters for sale in Akron Ohio   Die cast model cars for sale in Akron Ohio  
used cars for sale in Akron Ohio   unfurnished homes for rent in Akron Ohio

RELATED MORTGAGE AND REFINANCING ARTICLES: Mortgage Terms Explained When you are hunting for a mortgage, you will find that there are many different types of mortgages available. I will list some of the more common ones and their uses. What is an Offset Mortgage? An offset mortgage is very similar to a current account mortgage - but instead of having everything all in one account, all accounts are held separately. The offset mortgage concept treats your money as one giant pot, with each element (mortgage, savings, current account etc) separate to the rest. Home Mortgages: How About Those 1.75% Loans? You've undoubtedly heard or seen ads for mortgages with very low interest rates such as 1.75%. Home Mortgages: Think Before You Borrow In today's overheated housing market, lenders are making it easier and easier to get a mortgage. For example, some lenders have lowered the credit score needed to qualify for a mortgage. Home Mortgage Refinancing - Things to Consider When Looking to Get Cash Out on a Refinance When you refinance your home mortgage, lenders often tempt you with the option of cashing out part of your home's equity. Cash at a comparably low interest rate may seem like a good option, but make sure you will financially benefit from it first. Mortgage Questions to Ask Your Lender Buying and financing a home today can be overwhelming. Here are some questions to ask your lender so that you can make informed decisions. An Infinity Mortgage? Here in Spain the concept of a mortgage period of 20 or 25 years is something new. The general feeling by the banks is that want their money back more quickly than banks in countries in which they are accustomed to longer periods. What Is The Best Deal For A Mortgage? Few of us invest the time and effort into researching and securing the best deal for a mortgage to purchase our home. For most of us, our house is the single most important and expensive purchase we ever make!. We invest a lot of time and effort into finding the perfect property in the best location and with as many of the features from our wish list as possible, yet, when it comes to finding the best deal for a mortgage, we take what is offered rather than researching and securing the best mortgage for our situation. Home Mortgage Loans For People With Bad Credit - 3 Ways To Improve Your Chances For Getting Approved Finding home mortgage loans are a reality for people with bad credit. By tapping into online home loan resources, you can find financing to buy a home. 10 Things to Look for in a Home-Equity Line of Credit If you are a homeowner, you've probably received offers to apply for a home equity line of credit (HELOC). Handled with care, home equity credit lines can be an excellent way to improve financial flexibility, provide readily available cash reserves for emergencies, or pay for large expenses (like college tuition or home improvements) that have irregular payment schedules. First Time Buyer Mortgages - Transforming Homeless into Property Owners Having just settled in life, you are finding the rentals putting too much of a burden on your finances. Nevertheless, you continue the payments thinking that purchasing a home would be practically impossible. Online Mortgage Loan Companies Are Convenient There are many reasons to use the internet to take care of your mortgage loan needs. Online mortgage companies can give you quick answers to your mortgage application and can often times give you an answer of whether or not you have been pre-approved within 24-48 hours after you submit your mortgage application. Tips for Finding the Best Agri Mortgage and the Best Agri Loan The Research Rates of Agri Mortgage. First thing, when finding an agri mortgage is to check the interest rates and the rate movements, too. The agri mortgage rates can't be too constant, they are rising and falling along the Wall Street security; that reflects the direction of rates. How to Secure the Best Mortgage Deal and Save Yourself Thousands in Interest When you consider that the average home owner will pay out far more in interest over the lifetime of their mortgage than their home actually cost in the first place, you can see why working to secure yourself the best possible mortgage deal now could save you tens of thousands of dollars in interest over the 25 - 30 year lifetime of your home loan. For the majority of us our house is the single most important and expensive purchase we ever make! Because this is the case we invest a lot of time and effort into finding the perfect property in the most ideal location, however few of us invest the time and effort we should into researching and securing the best possible finance method for purchasing our home. Finding the Best Home Improvement Loans When the time comes to do work around the house, finding good deals on home improvement loans can be vitally important. Home improvement loans can be used to help you improve any part of your house or other real estate, providing you with the money to get the materials that you need and to hire the professionals that can get the job done. How to Find the Best Home Improvement Loan If you're looking for the best home improvement loan for your money it can sometimes seem like an uphill climb. You may not know whether the offer that you've received is the best that you can get, or if you should try to find a better offer elsewhere? but you shouldn't let finding the best home improvement loan stress you out so badly. Mortgage Marketing W. Edwards Deming said "Marketing and innovation are the only source of value in business, everything else is a cost". What is an Interest Only Mortgage? An Interest Only Mortgage is one where the repayments are made up entirely of the interest on the loan. When the mortgage term is complete, the capital originally borrowed is still outstanding. Home Equity Loans - 5 Useful Application Tips Obtaining a home equity loan does not have to be a major ordeal. Unlike your first mortgage, you are already in the home, and usually time is not such a major factor. What Are Mortgage Brokers And Why To Use One "Mortgage" is formed from two words: the French word "mort" meaning "dead" and the word "gage" from Old English meaning "pledge". Sir Edward Coke (who lived from 1552 to 1634) explained the term: the land as considered "dead" to the mortgagor, as if the person never had it.

HOME | SITE MAP © 2012 - 2024 All Rights Reserved Increase pagerank with HitsSurfer