|Mortgage & Refinancing Information|
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
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If you have a poor or bad credit history with something in your past like a bankruptcy or a foreclosure, you know how difficult it can be when you try to get financing for a home mortgage purchase, refinance, home equity or second mortgage loan. Its important to be persistant in looking because there are home mortgage loans out there for people with bad credit.
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Build Your Own Dream House!
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Refinancing After Bankruptcy
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Reasons To Get A Home Equity Loan
Using a home equity loan really depends on what your needs, wants and desires are that prompt you to take the home equity loan in the first place.The most common reason people obtain the loan is for debt consolidation however other uses include home improvements, educational expenses, unexpected family emergencies, medical expenses and in some cases for big ticket purchases.
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A Home Equity Loan - Is It For You?
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What if a banker or mortgage broker told you he's loan you 25 percent above the value of your home? You might think it sounds great, but I sure hope you'd say no. This is a loan only the most money-hungry and unscrupulous loan officers will sell.
What Length Mortgage Is Right For You?
You've found the home that is right for you, and now you need to do the same thing for a mortgage. There are several options for people out there, each one designed for a different type of buyer.
Jacksonville Florida Real Estate Mortgage Home Loans - Get the Best Rate Everytime
There are hundreds of mortgage companies in the Jacksonville real estate market. All claiming to have the lowest rate and excellent customer service.
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