Saving from Bi-Weekly Mortgage Payments
How the house owner makes their mortgage payments can save a lot of money over the life of the loan. Tens of countless dollars can be saved by making bi-weekly mortgage payments and enables the house owner to settle the mortgage nearly 8 years early with a cost savings of 23% of 30% of total interest costs.
With the bi-weekly mortgage plan each year, one additional mortgage payment is made. That additional payment approaches the principal of the loan. Since the homeowner is decreasing the amount of the loan balance quicker, they are also minimizing the amount of interest charged over the life of the loan.
Here's an example:
A 30 year mortgage for $100,000 at a rate of 6.5% suggests the house owner will pay $127,544 in interest throughout the life of the loan. This also includes a $100,000 principal for a grand total of $227,544. Paying half of the regular month-to-month mortgage bi-weekly makes the interest $97,215, which is a cost savings of $30,329. The property owner would have to make over $42,000 before taxes in order to web that much cash.
Use our bi-weekly payment calculator to see how much you will conserve.
What You Should Look For
In order for the house owner to build equity in their home at a faster pace, the house owner should have a lender that will credit half of the regular monthly payment instantly. If the lender waits until the next payment has been gotten before crediting it to the loan's principal, the property owner will not see the complete advantage. Many lenders decide to hold partial payments in an account till the rest of it is received. This holds true in which the homeowner will not take advantage of half payments.
Many companies will make the deal to convert a mortgage to a bi-weekly payment plan with a charge. The lender will automatically withdraw the payments from the homeowner's savings account every two weeks.
How the house owner makes their mortgage payments can save a lot of money over the life of the loan. Tens of countless dollars can be saved by making bi-weekly mortgage payments and enables the house owner to settle the mortgage nearly 8 years early with a cost savings of 23% of 30% of total interest costs.
With the bi-weekly mortgage plan each year, one additional mortgage payment is made. That additional payment approaches the principal of the loan. Since the homeowner is decreasing the amount of the loan balance quicker, they are also minimizing the amount of interest charged over the life of the loan.
Here's an example:
A 30 year mortgage for $100,000 at a rate of 6.5% suggests the house owner will pay $127,544 in interest throughout the life of the loan. This also includes a $100,000 principal for a grand total of $227,544. Paying half of the regular month-to-month mortgage bi-weekly makes the interest $97,215, which is a cost savings of $30,329. The property owner would have to make over $42,000 before taxes in order to web that much cash.
Use our bi-weekly payment calculator to see how much you will conserve.
What You Should Look For
In order for the house owner to build equity in their home at a faster pace, the house owner should have a lender that will credit half of the regular monthly payment instantly. If the lender waits until the next payment has been gotten before crediting it to the loan's principal, the property owner will not see the complete advantage. Many lenders decide to hold partial payments in an account till the rest of it is received. This holds true in which the homeowner will not take advantage of half payments.
Many companies will make the deal to convert a mortgage to a bi-weekly payment plan with a charge. The lender will automatically withdraw the payments from the homeowner's savings account every two weeks.