Evaluate The Quality of Your Pre-Approval With One Easy Question

The Pre-Approval Letter is one of the important steps of any real estate transactions.  A well done pre-approval letter ensures the buyer has a high likelihood of securing funds necessary to complete the purchase transaction. Most pre-approval letters are not difficult to complete.  All pre-approval letters, however, do require effort and …

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About the bi-weekly mortgage payment program, and whether it’s an effective way to own your home faster. Analysis, plus today’s live mortgage rates.

Source: Bi-Weekly Mortgage Program: Are They Even Worth It?

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Mike Nelson - AFNI am asked from time to time what I think about the bi-weekly mortgage payment program.  For some reason this question seems to be polarizing too.  People usually have a strong opinion one way or the other.  My answer is almost always the same – it depends.  It depends on your financial situation and  your financing options.

Mortgages are personal.  They must fit your needs!

The concept if the bi-weekly plan is certainly well founded.  In essence, the borrower will pay an additional payment over the course of a year and thus save on interest.  In some cases it can be staggering just how much interest is saved over the life of the loan.  I am always in favor of saving interest and accelerating principal payments when it comes to mortgages.

However, there are many scenarios in which a bi-weekly payment plan is not advantageous to the borrower.  For example,  ARM’S are effective interest saving loans for borrowers who are going to move in the first several years of owning their home.  In this particular example, an ARM is usually a better financial decision than a bi-weekly mortgage.

Mike Nelson - AFNYou Don’t Have to Sign A Contract to Achieve the Same Thing as a Bi-Weekly Payment Plan

Remember, you never get anything for free.  Trust me when I tell you this is true in the mortgage business.  If you decide a bi-weekly plan is right for your situation, you can achieve almost the same benefits without obligating yourself to two payments a month.

Divide your monthly payment by 12 and add that amount to your payment each month.  The overage you pay will go directly to principal and, in essence, will equal one extra payment over the course of the year.   You will be shocked at how much interest you will save over the life of a loan if you pay a little extra each month – especially in the early years of the loan.

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Bi-Weekly Mortgage Program: Are They Even Worth It?

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