Get a biweekly mortgage or make extra payments on your own?

Written by Syd Johnson


Consumers are more aware than ever ofrepparttar advantages of a biweekly mortgage. This is a type of mortgage where you make two equal payments per month instead of one. A Biweekly mortgage is great because you end up making one extra payment per year. This extra payment will decrease your principal and overrepparttar 112111 life ofrepparttar 112112 loan, decreaserepparttar 112113 amount of interest that you will pay for borrowingrepparttar 112114 money.

Forrepparttar 112115 average loan,repparttar 112116 difference means that your 30-year mortgage will be paid off in approximately twenty years. Today, lenders are eager to help customers switch torepparttar 112117 biweekly payment schedule because they get their money back in much less time. As with most loan or credit products,repparttar 112118 small monthly deposits plus time leads to a rapid reduction in your outstanding balance.

Getting Started To set up a biweekly mortgage call your lender or servicing company and ask them to change your payment schedule. Always ask upfront if there are any fees involved. Usually there is one time administrative fee to set up your account. Some lenders will also charge a recurring fee that is added to every payment.

Even fewer lenders will charge both a one time fee andrepparttar 112119 recurring servicing fee. As long asrepparttar 112120 exact amount ofrepparttar 112121 charges are stated up front you should still see a significant decrease in your loan balance annually.

What is an Adjustable Rate Mortgage?

Written by Syd Johnson


An adjustable rate mortgage is a type of loan whererepparttar interest rate andrepparttar 112110 monthly payments vary over time. The rates are adjustable usually starting out withrepparttar 112111 lowest interest rates up front andrepparttar 112112 highest rates coming later on inrepparttar 112113 life ofrepparttar 112114 loan. The interest rates are increased according to a predetermined schedule. Usually, you can expect increases every 6 months to a year.

Low starting rates The big advantage that an adjustable rate mortgage (ARM) offers isrepparttar 112115 low initial payments. If your lender cannot qualify you for a fixed rate mortgage, you can probably get an adjustable rate mortgage instead. Of course, make sure that you can afford payments atrepparttar 112116 high end as well asrepparttar 112117 low end ofrepparttar 112118 interest scale.

Always available Another big advantage of an adjustable rate mortgage is that they are always available. If interest rates are incredibly high, you can get an ARM quoted at a much lower rate, becauserepparttar 112119 lender will still make a lot of money overrepparttar 112120 life of your loan.

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