Archive for March, 2006

Home Loans

Is the Bi-Weekly Mortgage a Good Deal?
(presented by www.refinance-refinance.net - mortgage lenders)

Friday, March 31st, 2006

By Bob Sherman

Perhaps you’ve read the bi-weekly mortgage ads that claim you’re paying too much in mortgage interest. They say you can save $60,000 in interest and pay off your mortgage years ahead of schedule.

How can you realize such huge savings? And, how can you eliminate your mortgage debt so quickly? The bi-weekly mortgage is an answer.

Thousands of people every month search the Internet for information about a bi-weekly mortgage. And, any bi-weekly mortgage calculator will show you that you really can save a lot of money.

So, exactly what is a bi-weekly mortgage and what are your options for getting those tremendous results?

A bi-weekly mortgage simply involves making half your mortgage payment every two weeks. Since there are 52 weeks in a year, you will be making 26 payments. Since each payment is half your current monthly mortgage payment, you’ll essentially be paying the equivalent of 13 monthly mortgage payments.

How to Save Interest and Reduce the Length of Your Loan

You can save interest and reduce the length of your mortgage loan by adding extra money to your mortgage payments.

Let’s say you have a $150,000 mortgage for 30 years at 6.34%. Your principal and interest payments are $932.37 per month.

Your first payment of $932.37 covers $792.50 in interest. $139.87 is applied to the principal to help reduce your mortgage debt.

The net result of paying $932.37 is to reduce your debt by $139.87. From your viewpoint, that is what your first payment accomplishes.

Your second payment does slightly better. It reduces your debt by $140.61. But, at the same time, you pay $791.76 for interest.

But, what if you added another $140.61 to your first payment? That extra $140.61 would go directly to reducing your mortgage debt. Your first payment would then reduce your debt by $139.87 + $140.61 (or $280.48). It would have accomplished what your first two payments would have done.

Essentially you could erase the second payment from your !
mortgage
schedule and move all the other payments up. Now instead of 360 monthly payments, you would only need to make 359 payments. And you would have saved paying $791.76 in interest.

This illustrates the benefits of adding extra money to your mortgage payments.

Bi-Weekly Mortgage Does a Similar Thing

A bi-weekly mortgage does the same thing. Because you’re essentially paying 13 mortgage payments a year, that extra money is directly reducing your mortgage debt and decreasing the length of your loan. At the same time, it’s reducing the total amount of interest you will pay.

(Article continues below)

HOME LOANS ADVERTISEMENT

A bi-weekly mortgage service withdraws half your mortgage payment from your bank account every two weeks. When the mortgage is due, the bi-weekly mortgage service pays the amount it has withdrawn from your account to your mortgage company.

Twice a year three withdrawals are made in a month. In those months, that extra money is added to your normal payment. This reduces your debt, decreases the length of your mortgage, saves interest and builds equity faster.

How Much Better is the Bi-Weekly Mortgage?

This depends on your total mortgage payment. The amount of your monthly mortgage payment, usually called the “PITI payment”, comprises payments for Principal, Interest, Taxes, and
Insurance. Your mortgage company actually pays your homeowner’s insurance and taxes. For the same mortgage amount, the total PITI payment varies from home to home.

Let’s say your annual real estate taxes are $2,000 and insurance is another $800. You’ll need to add one twelfth of the sum of your taxes and insurance to your mortgage payment. One twelfth of $2,800 is $233.33. Adding this to the principal and interest payment of $932.37, we’ll get a total monthly PITI payment of $1,165.70.

Using a bi-weekly mortgage right from the start, you will pay it off in just over 24 years. You’ll also save just over $49,000 in interest. So, the advantage of paying more than the minim!
um payme
nts is huge. (Note that some online bi-weekly mortgage calculators do not take into account the entire PITI payment. Their results will differ from those presented here.)

Is a Bi-Weekly Mortgage Right for Me?

You can regularly add extra money to any of your mortgage payments. A bi-weekly mortgage service is just a convenient way of accomplishing this.

Now, the bi-weekly mortgage service is typically a middleman in the payment of your money to the mortgage company. It typically charges you a set-up fee (perhaps $200) and a bi-weekly withdrawal fee (about $4). This is extra money you are paying for the convenience of automatically making more than the minimum mortgage payment.

If you lack the self-discipline to write out checks for more than the minimum payments, a bi-weekly mortgage service can help you achieve the promised savings.

If you can exercise self-discipline, are dedicated to reducing your debt and believe you can make more than the minimum payments on your mortgage, then you can eliminate the middleman. You can simply add extra money to your mortgage payments and reap the benefits yourself. And, you’ll save the setup and bi-weekly withdrawal fees.

Either way, you will be reducing the length of your mortgage, decreasing the amount of interest you’re paying, and increasing your home equity faster than making the minimum payments.

Bob Sherman is the owner of http://www.bobshermancredit.com/ a site dedicated to helping you reduce your debt and build wealth. He offers a free ebook, “How to Free Yourself from Credit Card Debt”, available on his website.

===========================================
For additional Mortgage Refinancing information
and resources visit Mortgage Refinancing.
(http://www.refinance-refinance.net)
===========================================

Posted in Refinance | No Comments »

Home Loans

No Obligation Mortgage Quotes Online
(presented by www.refinance-refinance.net - mortgage lenders)

Friday, March 31st, 2006

By Louie Latour

Mortgage lending as an extremely competitive business; because of this competition it is a borrower’s market. You can negotiate and receive nearly any reasonable term or condition you want. To do this you need to contact as many different mortgage lenders and brokers as possible to compare the maximum number of loan offers possible.

Using the Internet is an excellent method to simplify this process. When shopping online make sure you are using sites that offer secure connections and do not request too much personal information like your Social Security number. It is easy to find lenders using search engines such as Yahoo. You can recognize a secure connection by the small padlock icon displayed in the lower right corner of your browser window.

(Article continues below)

HOME LOANS ADVERTISEMENT

When shopping for loans, you want to request no obligations form these lenders. When requesting no obligation quotes you will have to provide the lender with an overall picture of your financial situation and you can do this without the lender accessing your credit report. You want to keep credit inquiries to an absolute minimum when shopping for a mortgage.

Make sure when you compare quotes from mortgage lenders that you compare loans of similar term lengths and conditions. It does not help to compare a fifteen year loan to a 30 year loan as these loans will have different terms and conditions associated with them. Make sure you compare the lender

Posted in Refinance | No Comments »

Home Loans

Streamline Your Mortgage Search
(presented by www.refinance-refinance.net - mortgage lenders)

Friday, March 31st, 2006

By Louie Latour

When refinancing your home mortgage there are many potential mistakes you can make. Many of the pitfalls can be avoided with common sense; however, the stresses of mortgage finance are not always black and white. The best way to avoid mistakes is not to rush; if you move too quickly it is easy to overlook details that could cost you thousands of dollars down the road. It is best to try and remain emotionally detached when dealing with your finances as this will help you remain objective and help to keep your stress level down.

(Article continues below)

HOME LOANS ADVERTISEMENT

Do Not Exaggerate Your Income or Assets

You might find it tempting to exaggerate your income, what monthly expenses you have, and how much money you have in the bank. This will only slow the process and could cost you favorable loan terms or the interest rate you had hoped for. The mortgage lender could even deny your loan.

Never Sign Incomplete Documents

This may seem like common sense; however, signing a blank form or something you haven

Posted in Refinance | No Comments »

Home Loans

Home Equity Loans
(presented by www.refinance-refinance.net - mortgage lenders)

Friday, March 31st, 2006

By Max Bellamy

A home equity loan is an amount you borrow against the security of the house that you own. What the lender normally does is take the current market value of the property, deduct outstanding liabilities on it, if any, and lend you the difference (net worth).

Some companies limit the loan to 80 or 90 percent of the net worth.

You can opt for either Home Equity Line of Credit (HELOC) or Standard Home Equity Loan. In HELOC, you are allowed to draw from the sanctioned amount according to your needs. The interest rate is variable according to changes in the prime rate. A Standard Home Equity Loan is disbursed as a one-time payment. It is to be paid back in equal monthly installments over the approved loan period, which can up to thirty years. In this category, interest is fixed. It is possible for people with poor credit rating also to avail of home equity loans.

(Article continues below)

HOME LOANS ADVERTISEMENT

The borrowed amount can be used for any legitimate purpose that you choose like buying a car or closing a costlier liability. The interest rate is comparatively low, and in most cases, tax-deductible. The shorter the term of the loan, the interest will be lesser. In the U.S., the cost and terms may vary according to the place of residence because there are State regulations.

Approval of the loan is normally quick; a sanction could be obtained even on-line. Applying for a home equity loan doesn’t cost anything. But there may be concealed charges in the package offered. Therefore, obtain quotes from different lenders and compare them. Check with someone you know who has taken a similar loan or your financial advisor. Also, free consultancy is available from agencies approved by the U.S. Department of Housing and Urban Development (HUD).

Before venturing out for a home equity loan, consider whether you really need to borrow and also assess your repayment capacity. Don’t forget that there are risks involved, like the market value of the building declining. Defaulting repayments could result in the loss of your home.

iv style
="float: right; padding: 0px; margin: 0px; border-width: 1px 1px 1px 1px; border-style: solid; border-color: white; background-color: white">

Home Equity Loans provides detailed information about home equity loans, bad credit home equity loans, fixed rate home equity loans, home equity loan calculators and more. Home Equity Loans is the sister site of Car Refinance.

Posted in Refinance | No Comments »

Home Loans

Fixed Rate Home Equity Loans
(presented by www.refinance-refinance.net - mortgage lenders)

Friday, March 31st, 2006

By Max Bellamy

A fixed rate home equity loan, sometimes called ‘second mortgage‘, is a borrowing against the equity of your home. Equity means the current market value of your home minus the outstanding liability. Certain percentage of that net worth is advanced as loan. This is known as Loan To Value (LTV) ratio. Disbursement of the amount sanctioned is made in one lump sum. Normally you can choose up to thirty years for amortization. The amount of monthly repayment inclusive of interest is fixed.

Lenders usually stipulate a minimum and maximum for the amount that can be sanctioned. The longer the amortization term, the interest rate will be higher though fixed. You must decide on the period for which the loan is to be taken based on your repayment capacity. The interest paid qualifies for tax deduction in most cases. The money obtained through the loan can be used for any purpose that you choose. It is prudent to utilize the funds to pay off high interest bearing advances like credit cards. If the money is spent for home improvement, your equity enhances.

Before applying for the loan it is wise to analyze the specific purposes for which the funds are required. Obtain a few quotations from different lenders and do a comparative study of the terms and conditions. Be wary of loan sharks and hidden costs. And remember that the cost of a loan is not constituted by interest alone. The chances are that there will be closing charges. Some lenders may stipulate other fees as well. A penal charge being imposed for pre-closing the loan is quite common. Those with poor credit rating may find it easier to obtain home equity loans.

There are risks involved. If repayments are not made on time, you could end up losing your house. If the house is sold before paying off the loan the money you get in hand will be limited.

Get all your doubts clarified before signing on the dotted line. Check with your financial advisor. Or you could get free consultancy from organizations approved by the U.S. Department of H!
ousing &
amp; Urban Development (HUD).

(Article continues below)

HOME LOANS ADVERTISEMENT

Posted in Refinance | No Comments »

Mortgage : Home Loans : Refinance : Home Equity Loans