What Advantage Is There With Mortgage Plans That Have Bi-Weekly Payments?
Some mortgage companies allow you to set up your mortgage so that you are making bi-weekly payments. This allows you to pay off your mortgage at a much faster rate. While certainly not for everyone, here are some things that you need to know as to why you may want to consider getting your mortgage with bi-weekly payments.
The most beneficial bi-weekly payment option, which is a true bi-weekly mortgage payment plan, will take payments out every two weeks. Yes, they like the automatic payments – probably better for you, too, that way you do not have to worry about late payments. The first payment is half of your monthly mortgage payment, and then the second one is also half. All together, you will have paid the equivalent of 13 months of payments in only 12 months.
The difference in programs that have bi-weekly payments makes a real difference in how much you end up paying. This means that you need to understand exactly what happens with the payments when the company gets them. What you want is to have your lender apply the payment to the mortgage on the very day that they receive it. This will give you a nice reduction in interest.
Other lenders, not wanting to lose some of that sweet interest, put your payments into another account, and then when they have a full payment for each month, pay for that month. Also, at the end of the year, when they have the full 13th payment, then it gets applied. What a difference it will make over the years in the interest that you pay when the lender fools around like this with your money. What you want is for the payment to be credited to your account when you make the payment.
A similar effect can be obtained if you make an extra payment each year on your own, but the savings will not be quite as good. Being that with a real bi-weekly payment plan, you could pay off a 30-year mortgage in about 18 to 22 years, the potential savings are tremendous. It is possible to save about $34,000 for each $100,000 that is owed.
Anytime that you make extra payments on your mortgage – the effect is the same – reduced interest rates. Bi-weekly payments allow you to have big savings on your mortgage, and will also allow you to build up equity in your home at a much faster rate, too.
If you already have a mortgage, your lender may not allow you to easily switch to a plan with bi-weekly payments. Since it involves more work for them, they may not want to be bothered and may not even offer such a program. Even if they have it, about the only way some lenders would allow you to make the change would be for you to refinance your mortgage and then all fees would apply, including points.
A bi-weekly payment mortgage plan is also a little higher in interest because of the added work for the mortgage lender. Be sure to look at all the fees that may apply, and then compare offers thoroughly before you buy.
Joe Kenny writes for the UK personal finance sites http://www.ukpersonalloanstore.co.uk and also http://www.selectloans.co.uk
Is Mortgage Financing Possible With Bad Credit?
Being able to buy that new home is still an option – even if you have bad credit. Lenders are definitely getting softer on their requirements for financing mortgages for those whose credit is not perfect. Here are some things that you need to know about getting your next home financed with bad credit.
The first thing that you should know is that getting the best deals in mortgage financing is only for those who do have good credit. Still, though, there are deals available that can put you into that house.
A zero down mortgage will allow you to possibly get financing and not even have to put anything down. In fact, it may be possible to get as much as 107% of what you need, and that could even include the closing costs. Depending on your actual credit score, this type of mortgage can be obtained with a credit score as low as 580, with documentation. The way it works is to give the borrower two mortgages, a first and a second. Typically offered in an 80/20 or 75/25 arrangement, this allows you to have greater savings since that process will not require private mortgage insurance.
Another way to reduce the payment is to be able to put something down – the larger the better. Although you may want to get a mortgage as cheaply as possible, you can reduce the mortgage payments, and possibly the interest, if you can put something down to even 3 to 5% will make a difference. This will show the lenders that you are making enough to save something, and that you have some control over your spending, which is always a good thing to them.
Other deals will simply include the more traditional type of mortgages. This type of financing for people with bad credit is available even for lower credit ratings than that. Some lenders will extend a mortgage for someone with a rating of 500, and some will probably even go lower than that.
Even though you can get a mortgage on your new home, it may be more important to wait and rebuild your credit first. Although it means holding on to those dreams a little while longer, by rebuilding your credit first, you can not only get a better interest rate, but you can also get a larger mortgage, and lower payments. If you take some steps quickly, rebuild your credit to closer to where it should be, then you can get those rates you want, a nice house, and payments that you enjoy even more. Besides, this could even allow you to have some extra money to do some of those other things you want, too.
Of course, you want to be very careful about the type of mortgage you get. This means that you take the time to learn about the different mortgage types, such as fixed rate and adjustable rate, and also know the terms. Unfortunately, some lenders are looking for people with bad credit, knowing that they may be a little more desperate to get a mortgage, and may do so hastily without carefully reading the agreement, or really understanding what they are signing. Only by being careful and understanding what is involved can you be sure to avoid trouble.
Joe Kenny writes for the UK personal finance sites http://www.nationsfinance.co.uk/mortgages/ and also http://www.ukpersonalloanstore.co.uk/mortgages.html
Using Debt Consolidation Refinance to Pay Off Your Debt
For the vast majority of people living with too much debt is a burden that threatens the very foundation of their financial lives. Many financial experts like to distinguish between good and bad debt, but when there is too much of both it all seems bad no matter how you look at it. It all has to be paid no matter how good or how bad it may be. If this is you then a debt consolidation refinance loan may be the best way to get some relief.
If you are swimming in a pool full of debt that includes credit cards, car payments or medical bills it may be worth looking at some form of debt consolidation loan. This type of loan has become very popular in recent years because of the ability to take all your monthly payments and roll them into one payment at a significantly lower interest rate. The nice thing about this type of loan is that the interest is deductible on your income taxes.
The easiest way to do a debt consolidation refinance loan is to borrow money against the equity built up in your home. Your equity is value of your home minus any outstanding mortgage or second mortgage you may owe on it. This is important to remember because you are using your home as collateral so it’s imperative that you are sure that you can meet the monthly payments. You can use this equity to pay off any high-interest credit cards and lower your monthly payments at a lower interest rate.
But, and this is a very big but, you need to destroy all your credit cards and cancel the accounts if you do this. The temptation to start using them again is more then most people can handle and if you are not careful and rack up more credit card debt you may be in even worse financial shape. And if you default on your home equity loan the lender can foreclose and seize your home to recoup the cost of the loan. It is important to use a debt consolidation refinance loan as part of an overall program to get out of debt and stay out of debt.
Typically the interest rate you will pay on a debt consolidation loan is much less then on credit cards or other types of loans you may have. This is the main reason that these types of loans are so popular. With a lower rate more of your money can go towards paying the principal getting you debt free in a shorter amount of time.
Getting out of debt should be a priority for everyone. Debt is debt and the more you have the greater your chance of never experiencing true financial freedom. With that being said doing a debt consolidation refinance can be a good starting point for getting your finances under control to a point where you can breath easier and start building a brighter financial future.
To learn more about debt consolidation refinance please visit the website Home Equity Loan at http://home-equity-loan.home-choices-net.com/home-refinancing/Debt-Consolidation-Refinance.html
Helpful Remortgage Information That You Should Know
If you borrow money form a lender and pledge your home as security for the loan then this is commonly known as a mortgage. It is also often known as a home equity loan because it is secured against the equity in your home. The terms and conditions of the mortgage are set by the lender and they set such things as the manner in which you are to pay the instalments; when you have to pay the instalments; the term of the loan; the fact that the lender has the right to repossess your property should you default on the payments; and the interest rate. If you are not happy with any of the terms, in particular the one governing the interest rate that is to be applied to the loan then you should consider a remortgage.
A remortgage is where you take out a further mortgage, normally with a different lender, and use the proceeds of the new mortgage to pay off your existing mortgage. In this way you can often get better terms and conditions and in particular a lower interest rate.
If you built or bought your home with a mortgage and been paying a high rate of interest on it you may consider a remortgage. It could be that the loan market is offering lower interest rates in general or that you in particular are now able to get a lower rate of interest. This could be due to your credit score or rating having improved since you took out your mortgage. This is the time to remortgage and save huge amounts of money over the term of your loan. A lower rate of interest means a cheaper loan.
You may have more equity in your home now because real estate prices have gone up. You could consider a remortgage to allow you to use some of that extra equity to increase your mortgage. If you get a lower rate of interest you may be able to borrow more and still pay less per month.
If you do have spare equity in your home you may be able to do a debt consolidation remortgage. This is where you refinance your mortgage and increase the loan to enable you to not only pay off the existing mortgage but also your unsecured debts such as loans and credit cards. As you are using your house for collateral you are likely to be able to get a lower rate of interest than you the rate on the unsecured debt.
If you can afford to pay a bit extra per month you may consider a remortgage and reduce the term of the mortgage. If you reduce your mortgage term the mortgage will cost you a lot less. However, it will cost you more each month because you need to pay more of the capital each month to repay the loan over the shorter period of time.
Shelley Green is the owner of http://www.mortgages-click.com, a site that specializes in mortgages. Shelley Green is also the owner of http://www.loans-click.com and http://www.refinance-click.com.
Why Using A Mortgage Broker Can Save You Money
Being able to get the house you want should make you happy as a lark. But what if, after you move in, you find out that you may have been able to get a much better financial deal than what you got? Would you still be as happy as a lark? It is quite possible to get the best deal in the first place by using a mortgage broker. Here is how a mortgage broker can save you some money.
It needs to be stated from the start that a mortgage broker will not always be able to get you the best deal, but could, probably, in most cases. So many people, however – too many people, in fact, are still accepting the first offer they are given for their mortgage. Getting that good deal, however, takes more than just comparing loans.
A bank lender will only be able to offer mortgage products that their own bank creates. These products, of differing values, are limited. Sometimes a lending agent may not want to compare the different products his or her bank offers in order to find an exact match for your needs. At other times, a bank agent will work very hard for you.
A mortgage broker, however, only gets paid when a sale is made – in other words – when a mortgage is signed. This means that it is in their best interests to get for you a highly competitive deal. They deal with many different lending companies on a regular basis and know what each of them are willing to do – in the very recent past. When you contact a mortgage broker, there often will not be any fees. They will then get your information from you and send it to several companies that they think will give you a very competitive offer.
Another benefit comes from the way that they perform their services. A banker will give you a more institutionalized service, and your interaction with him or her will be more formal. A mortgage broker, however, will be glad to take more personal time with you, making you feel more welcome and will probably spend more time with you and for you. In fact, he or she may even come to your house.
Mortgage brokers have access to mortgages at a slightly less price than a banker might provide. This is because they deal with wholesale prices rather than the retail. Their service offered to lenders means a savings for the lender because the lender does not need to maintain sales staff except when a sale is made.
Even when there may be a problem with your credit, the value of a mortgage broker can really be seen. Because they know many different lenders and each of their specialties, they can work to find lenders that can give you a great deal. They would already know which lenders regularly give money to those with bad credit or whatever special need you may have. A bank representative, however, while still able to offer a number of products, is limited to only what their branch offers and the special deals they give.
Joe Kenny writes for the UK personal finance sites http://www.ukpersonalloanstore.co.uk/mortgages.html and also http://www.nationsfinance.co.uk/mortgages/