How to Save a Fortune On a
Mortgage
How?
Instead of making
your mortgage payments once a
month, make half a payment every
two weeks. This is considered a
bi–weekly payment plan.
By making
your payments every two weeks,
you end up making 26 payments a
year (52 weeks in a year divided
by 2 = 26 payments a year).
Making 26 payments a year (one
every two weeks) is like making
an extra month's payment each
year (26 payments divide by 2 =
13 monthly payments). Making
that extra monthly payment each
year will cut your interest
costs dramatically.
Here are some
scary facts about mortgages:
-
After paying
15 years on your 30–year
mortgage, you'll still owe
90% of he amount borrowed!
-
After paying
nearly 24 years, you'll
still owe over 50%.
-
You'll pay
over
3 times the amount
originally borrowed before
paying off your mortgage.
-
To make
matters worse, the FDIC
estimates that 1 out of
every 2 mortgages are
miscalculated,
overcharging homeowners $8 -
$10 billion dollars each and
every year.
-
On a
conventional 30–year
mortgage, you'll make over
120 unnecessary payments!
Here's what a few
prominent publications and
institutions have to say about
bi–weekly mortgages:
THE WALL
STREET JOURNAL
reports, "A $70,000 mortgage at
10.5% annual interest produces
savings of $60,000 when repaid
on a bi–weekly basis."
CONSUMER
REPORTS
says, "Whether you already have
a mortgage or are in the market
for a new loan, you can probably
save tens of thousands of
dollars by using a bi–weekly
mortgage schedule".
According
to USA
TODAY,
" What started as a mortgage
lender's marketing gimmick is on
its way to becoming the hottest
home loan of the decade. It's
the bi–weekly mortgage, and it
is as simple as paying half a
monthly mortgage payment every
two weeks. The attraction:
Bi–weeklies reduce interest
expense and build home equity
faster."
PARENT
states, "The simple fact is that
a bi–weekly mortgage schedule
not only saves the homeowner a
bundle, but makes him or her a
homeowner much sooner.
According
to THE
NATIONAL COUNCIL OF SAVINGS
INSTITUTIONS,
"Bi–weekly
payments are 'pro–consumer'
because they correspond to
America's paydays making
mortgage payments much easier
for homeowners who are on a
tight budget or have a difficult
time saving money."
THE
WASHINGTON POST
says, "IT PAYS TO CHECK LOANS
FOR OVERCHARGES. Of 9,000
Adjustable Rate Mortgages
checked, errors were found in
nearly half. Average refund owed
to the homeowner: $ 1,588.00."
Now as with
anything that sounds to good to
be true there's a catch. In some
cases, Mortgage lenders will not
be willing to allow you to
re–organize your payment plan.
Therefore, you will need to use
a Third Party Payment Servicer.
Here are
somethings you need to be aware
of when thinking about using a
Third Party Payment Servicer:
-
Initiation
Fees
There may be "initiation" or
start–up fees
-
Stability of
the Servicer
Be sure to use a Servicer
who is affiliated with a
bank, savings & loan or
other federally insured
entity.
-
Wire Transfer
Requirements
In the event your bank will
not accept electronic
payments be sure your
Servicer is willing to send
a check.
-
Timely
Payments
Be sure to ask the Servicer
what safety measures are in
place to ensure your
payments will be made on
time.
-
Drafting Fees
Some companies ask for a
drafting fee for electronic
transfers. Shop around.
Of course, if you
have the discipline, you may be
able to do this yourself.
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