Show me the money!
The notion of paying on a mortgage for a home in Charleston or Huntington
WV for a 30-year period can be a little bit frightening and may distract
some from the true value of owning their own Real Estate.
However, with the right financial planning one may be able to shrink this
30-year period to as little as 23 years and maybe more should you load up on
payments. Enter the Bi-Weekly payment. We shall use the following example to
show just how much savings you can attain through this method: $100,000
30-year mortgage at a 6.5% will accrue $127,544 in interest, plus the
$100,000 principal. Therefore, you would pay a total of $227, 544. However,
if you would pay one-half of your monthly mortgage every two weeks you would
only accrue $97,215 in interest, a savings of $30,329! Obviously the more
you would be able to pay, the more money you would save and the less the
life on your loan would be.
Please keep in mind that there are such things as
pre-payment penalties with some banks so it is best to check with your
lender to see if this would apply to you. Typically, those most apt to incur
such a fee would be those whose loan is bought out by a secondary market
(this is usually those with questionable or high-risk credit... CHECK WITH
YOUR LENDER!) In addition, it is also best that you make sure your lender
will apply the first payment of the month at that exact time and not when
the second one arrives. Otherwise, these efforts are futile and you will be
getting nowhere. In other words, do your homework or ask me where to start!
Check these links for more info
http://www.allbusiness.com/personal-finance/real-estate-mortgage-loans/3395-2.html
http://financialplan.about.com
