The majority of homeowners have a 30-year fixed rate mortgage. With this type of mortgage your payment never changes or deviates from the initial agreed-upon payment for the lifetime of the loan. If you start with $1,100 as your mortgage payment at the initiation of a 30-year fixed rate loan, your payments will be $1,100 on the last 360th month of the loan, which is the last payment due on the loan. This type of mortgage is typically paid monthly over the period of 30 years.
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With a 30-year fixed-rate mortgage, your interest rate does not fluctuate. Just like your payment, your interest rate does not deviate from what it was when the loan was initiated. It stays the same throughout the life of the loan.
Tiny Tweak to Turn the Tables
Make one tiny tweak with the way you make your payments on your mortgage. If you do, you could turn the tables on the interest you pay on your mortgage loan. You will save loads and accelerate the payoff of your mortgage.
This is how you do it. Instead of paying your monthly mortgage payment once a month, pay half your payment every two weeks. That is equivalent to paying 13 monthly payments each year. With a bi-weekly payment schedule, you’re going to pay off your mortgage much faster, as quickly as 24 years. You could save more than 35% of your original loan.
Let’s say you took out a $200,000, 30-year mortgage with a 7% fixed-rate. If you make bi-weekly payments, you can pay off this loan in about 24 years. You save around $69,000 in interest.
Video: A Guide to Loan Modification
Loan Modification Modifies Interest Rate and Payment
In these trying times of bailouts and stimulus packages, some are in need of a loan modification. Loan modification provides a way to change the terms of the mortgagor’s loan, resulting in a more affordable monthly payment. If you have experienced some difficulties paying your mortgage, you need to consider some alternatives in order to get back on track to be able to pay your payments. Loan modification may be a viable option for you.
A loan modification can actually lower your interest rate and your monthly payment. In order to start the process, you need to ask your mortgage holder for a loan modification. Next, your mortgagee will require you to provide your financial information, including expenses and income. After receiving them, your mortgagee reviews your financials. It is determined whether you qualify for a loan modification or not. If you do, your mortgagee will rework your loan lowering your interest rate and monthly payment to an affordable amount. With all the foreclosures on the market today, mortgage companies are much more willing to work with you to allow loan modifications. They don’t want to have to take possession and try to sell your home if another solution can be worked out.
In these trying times of bailouts and stimulus packages, some are in need of a