The Pros and Cons of a Bi-Weekly Mortgage

Having a mortgage can be expensive; with the interest that is charged over the life of your mortgage, a large portion of what you end up paying is nothing more than interest payments and not the loan itself. Obviously it's important to be able to pay off your mortgage as quickly as possible in order to keep the interest at a minimum, just as it's important to make sure that all of your payments are made on time so as to avoid late fees or other costs. One option that can help you to pay off your mortgage early while giving you the added benefit of having to pay less at any given time is a bi-weekly mortgage.

If you aren't familiar with the term, a bi-weekly mortgage is a payment plan which allows you to make a partial payment on your mortgage every two weeks. It's not an actual mortgage loan, but instead is a service which will help you to pay off your mortgage faster than you would be able to by simply making your standard payments each month. There are a number of pros and cons associated with bi-weekly mortgage services, and you should stop and consider some of these in order to make sure that a bi-weekly mortgage plan meets your financial needs.

<b>How Bi-Weekly Mortgages Work</b><br>

When you're using your standard mortgage payment plan, you're making one payment every month for a total of 12 payments per year. With a bi-weekly mortgage plan, however, you're making a payment equal to one half of your current payment every two weeks… this equals out to 26 half-payments over the course of a year. A bi-weekly mortgage essentially allows you to make one extra full payment each year, taking a full month off of your repayment schedule every year that you're using the bi-weekly mortgage plan. Even though you have to pay a service charge to the company offering the bi-weekly mortgage service, the savings that you receive in interest works out so that you still save money even with the added fees.

<b>Advantages of a Bi-Weekly Mortgage</b><br>

Obviously, the biggest advantage to a bi-weekly mortgage plan is the fact that you can pay off your mortgage early and save a significant amount of money on the interest that you have to pay. For most homeowners, this savings will be quite significant as they will be able to pay their mortgage off as much as two or three years early. Since the individual payments are lower than they would be if you were paying the full amount once per month, bi-weekly mortgage payments can also be much easier to fit into your budget. Many companies who offer bi-weekly payment services will let you tailor your payment due dates so that they best fit your income, letting you make payments when you get paid.

<b>Disadvantages of a Bi-Weekly Mortgage</b><br>

While bi-weekly mortgage payments may sound wonderful, there are some drawbacks associated with them as well. Probably the most important of these is the fact that even though you're making your payments to the service provider, you are still the one who is responsible for your mortgage. The service provider isn't a lender and doesn't have any sort of influence or control over your mortgage itself. They only make your mortgage payments once per month, just like you would; in the unlikely event that there's some problem in processing the payment, you may be required to pay it out-of-pocket while the problem is sorted out or risk receiving late fees or an interest rate increase for a late payment.

Another main drawback to bi-weekly mortgages is that the service which these companies offer isn't anything that you couldn't do by yourself with proper budgeting. When it comes down to it, if you have the self-control to structure your budget similar to making bi-weekly payments you could actually save significantly more by doing it yourself than you would through one of these services. You will save more because the service will charge you a transaction fee for each time they process one of your payments (in some cases you may have a fee for each time that they receive a payment from you via direct deposit, for each time that they make a payment, and an additional fee for account maintenance.) Depending on how you budget your finances, you may also be able to pay off your mortgage even faster than you would through a payment service by simply setting aside slightly more than one half of your monthly payment every two weeks. This only applies if you budget your money, of course.

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An Introduction to Mortgage Protection Insurance

Purchasing a home is a major expense that requires a significant and long term financial commitment. When you initially apply for a mortgage, you are approved for loan funding based on your financial status at the time of application. Most people do not expect that their financial situations will get worse over time, but in some cases that is exactly what happens. Whether through the loss of employment or the death of a family member, it is an unfortunate fact that many people find themselves in situations that keep them from being able to keep up with their home loan payments. 


<b>Importance of Mortgage Protection Insurance</b>


For many families, making mortgage payments would become difficult or even impossible in the event of the death of one or more members of the household. Before investing in a home, it is important to stop and think about how the house payments could be made if a major source of household income were to become permanently unavailable as the result of an unanticipated death. 


While no one wants to think that their family will ever face a worst case scenario, it's necessary to make contingency plans for every possible situation. Mortgages are such a large expense that it is important to consider how one's family would be able to avoid the threat of foreclosure, in addition to losing a loved one, if such a situation were to arise. Fortunately, it is possible to protect your family from having to face the possibility of such a situation by investing in mortgage protection insurance. 


Simply put, mortgage protection insurance is a life insurance policy that will pay off your mortgage following the death of one or more covered individuals. The primary purpose of this type of coverage is to reduce the financial burden placed on surviving family members following the death of a loved one. Homeowners who invest in this type of insurance coverage are making an important commitment to their families. This type of converge can ensure that one's family will never be forced out of its home as the result of income loss following the death of a family member. 


<b>Who Needs Mortgage Protection Insurance?</b>


In single income households, or families in which one partner earns the majority of the money, many people think that the only covered life needs to be that of the primary breadwinner. However, it is likely that the death of a non-working spouse, or one who works part time, can also have a serious impact on a family's ability to continue to afford to make mortgage loan payments. 


Many people make the mistake of focusing only on income loss following death. They neglect to think about the expenses that will increase if either adult household member is no longer around. For example, if the non-working spouse is staying home with young children, the family does not have to pay for full-time child care. However, if that parent were no longer there, the working parent would have to pay for child care, which is a significant expense, in order to continue working. 


<b>Where to Get Mortgage Protection Insurance</b>


There are a number of different options for making sure that your family remains financially able to stay in its home following the unexpected death of one or more members of the household. Many banks and other lenders offer mortgage protection insurance policies that can be purchased at the time you close on your home loan. 


These types of policies are specific to one's mortgage, and proceeds are disbursed to pay off the remaining loan balance upon the occurrence of a covered event. It is also possible that the company who carries your homeowners' coverage offers a mortgage protection policy. Payments for these types of polices can generally be included in the escrow payments for homeowners insurance and property taxes that are included in your monthly house payment.


Another mortgage protection insurance option, however, is to take out term life policies on the adult members of the household. These types of policies put more control in the hands of the surviving family members. Policy proceeds can be used to pay off the mortgage in a lump sum, as with a traditional mortgage protection insurance policy, or the individual can choose to continue making monthly payments while investing or otherwise utilizing the remaining funds. 


No matter which coverage option you select, the important thing is to make sure that your family is protected even under the worst possible circumstances. When you think about the alternative, the cost of mortgage protection insurance really seems to be quite small. When you purchase mortgage insurance protection, you are investing in peace of mind for yourself and for your family.

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Online mortgage quote: Why You May Not Be Getting The Best Rate

While shopping online for online mortgage quote can be great in terms of saving time and convenience, it won’t necessarily get you the best deals available. What you save depends to a great extent on the way you negotiate with lenders for the online mortgage quote. Like with any negotiation, you get the upper hand when you are knowledgeable about how the industry works.
One of the main precautions to take on when looking for online mortgage quotes is to ensure that the brokers you deal with represent several different lending institutes and therefore can offer you a good variety of options. Beware of brokers who are merely lender agents in disguise. If a broker represents only one bank or lender, there is a great likelihood that you will not be offered the online mortgage quote that is most suitable for your needs.
In devising consumer protection laws for online mortgage quotes and increasing convenience, states have ultimately ended up having an adverse impact on competition, apart from making online mortgage costs higher than necessary.
Explaining The Costs
Most states do not require online mortgage businesses to have a brick and mortar presence. However about one third of all states make this a mandatory requirement. Due to this, the expenses increase. Laws of this nature have prevented mortgage brokers from being exclusively online and offering much lower rates.
It is mostly the existing brick and mortar mortgage brokers who are the blame for the laws in a bid to minimize competition. The laws have also led to a multi-state licensing system due to which national mortgage firms with a presence in all states get an unfair online advantage over the competition. These companies don’t have to put in money into costly infrastructure apart from enjoying lower transaction costs and can therefore offer lower rates to consumers.
The Bottom Line
The reality is that the online companies who face compulsion to bear the costs of renting offices, employing a workforce and infrastructure and equipment which they would otherwise not require, choose to avoid doing business in that particular state altogether.
The end result is that it is the consumer who is eventually at a disadvantage. Their options are limited further for sources of capital and the competition among lenders is also less intense.

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Why You Should Consider an Adverse Remortgage

There are many reasons to consider an adverse remortgage, particularly if you have a variable rate adjustable rate mortgage (ARM) that is getting close to a scheduled adjustment. Many individuals who borrowed money to purchase a home under the sub-prime lending market have mortgage loans with very unfavorable terms.

<b>Who Can Benefit From an Adverse Remortgage?</b>

Many people with poor credit histories were so glad to be able to access funding to purchase a home that they did not stop and consider the long term consequences of having an adjustable rate home loan. Over the last few years, however, the landscape of the mortgage loan industry has made just how risky ARM loans can be for borrowers and investors alike.

Individuals who initially borrowed money to purchase a home under a sub-prime lending program may be pleased to find that their credit scores have started to head in the right direction, particularly if they have been making all their mortgage payments on time and have avoided taking on additional debt.

Those with unfavorable sub-prime mortgage loans can greatly benefit from applying for an adverse remortgage loan. This type of home loan is simply a refinance program designed for homeowners whose credit ratings are classified as adverse, yet have a positive track record of repaying the current mortgage loans.

While it can take years to repair a truly adverse credit history, establishing a pattern of on time mortgage payments may be sufficient to help homeowners get out of dangerous ARM loan situations. After all, it is in the best interest of lenders to make sure that goad customers have loan products that they are likely to be able to repay.

In some cases, adverse remortgage loans are a good option even for individuals who have not yet established a positive, on-time payment history on their home loans. Individuals who get behind on their mortgages can often opt to get an adverse remortgage loan that rolls the past due amount into a new loan. In some situations, this adverse credit refinancing option is the best route to prevent foreclosure.

<b>Who is Eligible for an Adverse Remortgage?</b>

Individuals with strong credit scores are not could candidates for adverse remortgage loans. While it is true that people in this situation would likely meet or exceed the criteria for being approved for an adverse remortgage it is not in their best interest to do so. Anyone who can qualify for a conventional home loan refinance can save a significant amount of money buy pursing that type of remortgage program rather than one designed for individuals with adverse credit histories.

The best candidates for adverse remortgages are individuals who are in the process of pulling themselves out of credit nightmares. Many people who apply and qualify for adverse remortgage loans have current financial problems, such as being in a state of arrears on their current home loan, having prior defaults, or having court judgments against them. This is why adverse remortgage loans are often referred to as bad credit refinance options.

<b>How to Apply for an Adverse Remortgage Loan</b>

If you don't have good credit, but need to find relief from the terms or payment amount of your current mortgage loan, applying for a bad credit refinance may be the best option for you. In light of the changes in the home loan industry in recent history, finding lenders who are willing and able to make adverse credit loans is becoming more challenging.

However, the fact that so many homes have gone into foreclosure since the 2007 meltdown in the mortgage industry has had a significant impact on the overall lending industry. Whenever possible, lenders today are willing to take proactive steps toward helping homeowners who have the means and inclination to make mortgage payments stay out of foreclosure by way of bad credit refinancing programs.

If you are having trouble keeping up with the payments on your current home loan, speak with your lender before the problem gets out of hand. If you, and your loan officer, are proactive in seeking bad credit refinancing approval before your situation becomes too bad, you may be able to qualify for an adverse remortgage with terms that are more favorable than the loan you currently have.

When you approach a lending company about applying for an adverse remortgage, it's very important to be honest about your financial situation. Take all of the documentation you are likely to need to use to demonstrate why you are not a bad investment risk even though your credit history is less than stellar.

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Top Ways to Benefit from the Current Mortgage Crisis

The current mortgage crisis might be a nightmare for the people who are directly involved in it. However, with a little bit of smart planning and a lot of hard work you can benefit from this mortgage crisis and come through the other end with flying colors. Remember that not every crisis has to be the end of the world, and if you are considering getting into the housing market you might be able to benefit from the current mortgage crisis in more ways than one.

<i>Stable Interest Rates</i>

The first way that you can benefit from the current mortgage crisis is to take advantage of the now stable interest rates that you can find. Many lenders are aware that people are no longer keen to invest in changing interest rates, and that many of these have led to foreclosures. Therefore, there are beginning to be many lenders that are advertising their own brands of stable interest rates that will not be changing with the market. These rates are something that you should take advantage of, because they will allow you to lock down your rates and your home payments for the life of your loan. If you can budget in this way, you will be able to get the home of your dreams at an interest rate that you can really afford.

<i>Hold On Tight!</i>

If you do have a home and are fighting with the market, the best thing that you can do is to buckle down and hold on tight. If you can keep your home through this crisis, it will end up being much better for you in the end. Remember that many lenders who put out adjustable rate mortgages are now allowing people to change to a fixed rate mortgage. If you can talk to your lenders and go through this process before you have to deal with foreclosure, you will be able to get an interest rate that you can afford, and a locked down home payment that you will be able to take care of each month. If you haven't fixed your rate or you cannot do it, hold on to your home as long as you can. Are there other things to sell or other ways to get the money for your home payment? If you can hold onto your home through the mortgage crisis, you will find home payments dropping again and will soon have more money than you do now.

Remember that you should also avoid the temptation to get out while property values are so low. Even if it seems like it is a better idea to get out before values dip any lower, you will actually lose money if you sell in the middle of the current mortgage crisis. Therefore, if you can hold onto your property until the values go back up again, you will be able to make your money back, or even make more money. Remember that this crisis cannot last forever, so if you can ride it out in whatever way you can you will benefit in the end. Remember that often patience is the best key that you might have to riding out the current crisis.

<i>Invest (if possible)</i>

One of the biggest ways that you can benefit from the current mortgage crisis is to invest if you can. If you are able to buy or invest in property that has been foreclosed upon, you will find that you can get this property at a much cheaper rate because of the foreclosure. This is something that will allow you to gain property and to gain money as well. The best thing to do when you invest is to buy a property and then sit tight on it until property values go back up again. They will eventually rise once more, and you will find that at that time you can resell your property and find yourself with quite a profit. If you are able to buy property at this time, you will surely be one of the people who benefit the most from it in the end.

No crisis can last forever, and that includes the current mortgage one. If you are able to hold on to what you have, invest in what you can afford, and lock down good interest rates, you will find that the market will eventually turn and you will again be able to prosper. You can take advantage of all of the other things that the market has to offer, and this crisis will pass you by without even a mark.

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The Pros and Cons of a Bi-Weekly Mortgage

Having a mortgage can be expensive; with the interest that is charged over the life of your mortgage, a large portion of what you end up paying is nothing more than interest payments and not the loan itself. Obviously it's important to be able to pay off your mortgage as quickly as possible in order to keep the interest at a minimum, just as it's important to make sure that all of your payments are made on time so as to avoid late fees or other costs. One option that can help you to pay off your mortgage early while giving you the added benefit of having to pay less at any given time is a bi-weekly mortgage.

If you aren't familiar with the term, a bi-weekly mortgage is a payment plan which allows you to make a partial payment on your mortgage every two weeks. It's not an actual mortgage loan, but instead is a service which will help you to pay off your mortgage faster than you would be able to by simply making your standard payments each month. There are a number of pros and cons associated with bi-weekly mortgage services, and you should stop and consider some of these in order to make sure that a bi-weekly mortgage plan meets your financial needs.

<b>How Bi-Weekly Mortgages Work</b><br>

When you're using your standard mortgage payment plan, you're making one payment every month for a total of 12 payments per year. With a bi-weekly mortgage plan, however, you're making a payment equal to one half of your current payment every two weeks… this equals out to 26 half-payments over the course of a year. A bi-weekly mortgage essentially allows you to make one extra full payment each year, taking a full month off of your repayment schedule every year that you're using the bi-weekly mortgage plan. Even though you have to pay a service charge to the company offering the bi-weekly mortgage service, the savings that you receive in interest works out so that you still save money even with the added fees.

<b>Advantages of a Bi-Weekly Mortgage</b><br>

Obviously, the biggest advantage to a bi-weekly mortgage plan is the fact that you can pay off your mortgage early and save a significant amount of money on the interest that you have to pay. For most homeowners, this savings will be quite significant as they will be able to pay their mortgage off as much as two or three years early. Since the individual payments are lower than they would be if you were paying the full amount once per month, bi-weekly mortgage payments can also be much easier to fit into your budget. Many companies who offer bi-weekly payment services will let you tailor your payment due dates so that they best fit your income, letting you make payments when you get paid.

<b>Disadvantages of a Bi-Weekly Mortgage</b><br>

While bi-weekly mortgage payments may sound wonderful, there are some drawbacks associated with them as well. Probably the most important of these is the fact that even though you're making your payments to the service provider, you are still the one who is responsible for your mortgage. The service provider isn't a lender and doesn't have any sort of influence or control over your mortgage itself. They only make your mortgage payments once per month, just like you would; in the unlikely event that there's some problem in processing the payment, you may be required to pay it out-of-pocket while the problem is sorted out or risk receiving late fees or an interest rate increase for a late payment.

Another main drawback to bi-weekly mortgages is that the service which these companies offer isn't anything that you couldn't do by yourself with proper budgeting. When it comes down to it, if you have the self-control to structure your budget similar to making bi-weekly payments you could actually save significantly more by doing it yourself than you would through one of these services. You will save more because the service will charge you a transaction fee for each time they process one of your payments (in some cases you may have a fee for each time that they receive a payment from you via direct deposit, for each time that they make a payment, and an additional fee for account maintenance.) Depending on how you budget your finances, you may also be able to pay off your mortgage even faster than you would through a payment service by simply setting aside slightly more than one half of your monthly payment every two weeks. This only applies if you budget your money, of course.

Read More

Online mortgage quote: Why You May Not Be Getting The Best Rate

While shopping online for online mortgage quote can be great in terms of saving time and convenience, it won’t necessarily get you the best deals available. What you save depends to a great extent on the way you negotiate with lenders for the online mortgage quote. Like with any negotiation, you get the upper hand when you are knowledgeable about how the industry works.

One of the main precautions to take on when looking for online mortgage quotes is to ensure that the brokers you deal with represent several different lending institutes and therefore can offer you a good variety of options. Beware of brokers who are merely lender agents in disguise. If a broker represents only one bank or lender, there is a great likelihood that you will not be offered the online mortgage quote that is most suitable for your needs.

In devising consumer protection laws for online mortgage quotes and increasing convenience, states have ultimately ended up having an adverse impact on competition, apart from making online mortgage costs higher than necessary.

Explaining The Costs
Most states do not require online mortgage businesses to have a brick and mortar presence. However about one third of all states make this a mandatory requirement. Due to this, the expenses increase. Laws of this nature have prevented mortgage brokers from being exclusively online and offering much lower rates.

It is mostly the existing brick and mortar mortgage brokers who are the blame for the laws in a bid to minimize competition. The laws have also led to a multi-state licensing system due to which national mortgage firms with a presence in all states get an unfair online advantage over the competition. These companies don’t have to put in money into costly infrastructure apart from enjoying lower transaction costs and can therefore offer lower rates to consumers.

The Bottom Line
The reality is that the online companies who face compulsion to bear the costs of renting offices, employing a workforce and infrastructure and equipment which they would otherwise not require, choose to avoid doing business in that particular state altogether.

The end result is that it is the consumer who is eventually at a disadvantage. Their options are limited further for sources of capital and the competition among lenders is also less intense.

Read More