Do you wish you could pay off your home mortgage loan more quickly than with a traditional 30-year fixed rate loan, significantly reducing the amount of interest you pay over the life of the loan? Well bi-golly, a Biweekly Mortgage may be right for you.
Biweekly Mortgage payments are made every two weeks, resulting in 26 (sometimes 27) payments per year. As a result of the number and frequency of payments, you can pay off the loan faster than with a traditional 30-year, fixed rate, monthly payment mortgage. For example, a loan that ordinarily would take 30 years to amortize fully could be paid off after just 23 years of biweekly payments depending on the interest rate of the loan. A Biweekly Mortgage may also save you interest expenses over the life of the loan. For example, a $150,000.00 loan at 7 percent rate paid monthly over 30 years will cost a borrower approximately $53,000 more in interest over the life of the loan than a Biweekly Mortgage for the same loan amount and interest rate.
I’m not sure about you, but an extra $53K might come in handy someday.
As soon as I graduated college I knew that I wanted to buy my own place. I had rented for four years, done the math of how much I had paid someone else, and was ready to start paying myself! Plus my family was done hauling my stuff to a new place every year.
I figured out my gross income from my first full time job and thought, “I’m ready to buy a house and some patio furniture!”
I went thru the process the blind way. Got pre-approved on one program, didn’t ask enough questions and got a lot of surprises at closing time. I tried researching on the internet and it was a great place to start, but should have sat down with a mortgage professional to clarify things for me.
Fees, insurance, and taxes were all things I could have gotten a better grasp on before starting the process but I had no idea how many mortgage options were available to me! I took the first mortgage that was presented to me, not cool considering I looked at thirty houses before making an offer. Just like houses, there are several mortgage programs on the market as well. There are 100% financed programs and no PMI insurance programs just to name a few.
So these are not your parents 20% down 30-year mortgage days. And mostly the unbelievable rates on the internet and radio are too good to be true. Always ask about fees, its not just interest-rates you are shopping! And see where your mortgage will be serviced. A lot of places sell it to another company you’ve never heard of as soon as you walk out the door.
It helps to talk to a real-live person, tell them you are a first time home buyer, and ask them tons of questions. They don’t mind! They want to help you get the home and will show you responsible ways of getting the funds.
So now I have a house, more information for next time, and still no patio furniture!!