The Bi-Weekly Mortgage

About 40% of Americans have no idea what type of mortgage they own...let me repeat 40% of Americans have no idea what type of mortgage they own! This is a big reason to why the housing market crashed so bad. American consumers aren't educated well enough when it comes to purchasing a home that is right for their current situations. That is why so many homeowners were scammed into Adjustable Rate Mortgages and Interest Only Loans. Most home owners were only fixed on 2 things....the MONTHLY PAYMENT and a LOW INTEREST RATE. Do not ever buy a home just because those two numbers look good to you. When purchasing a home you need a to do list:

1. Check your credit score? (Don't let banks and credit unions take advantage of you if you have good credit.)
2. It is a good idea to have a 5-10% down payment for your home. (It's not impossible to save that much.)
3. Shop the banks and credit unions for a perfect before you ever decide to begin looking at homes?
   
4. The two questions you need to ask about the loan 1- How long is the loan? 2- What is the total cost of my loan?

Time and total cost should be the real consideration when financing a home or a car. Now for the key to living the American Dream and becoming a Home Owner! Bi-Weekly Mortgage! Many people do not understand or even know about the benefits of having a Bi-Weekly Mortgage. I am about to blow the whistle on some banks and credit unions and things they don't want any home owner to know. Some banks and credit unions will make you believe you are on a bi-weekly mortgage because they draft half a payment on the 1st of the month and on the 15th. What they do not tell you is that they suspend both drafts from your bank account and do not apply it till the 1st of the following month, which doesn't help any ones situation but their own. How a true to life Bi-Weekly Mortgage works is that the full payment is split in half and that amount is paid and applied immediately to the loan every other week. Yes you will have 2 months in the year where you will pay 3 payments, in which you actually end up paying 13 months worth of payments...but that's not the true benefit of the Bi-Weekly mortgage. Let me show you some numbers that'll blow you away.

Here is an example of the benefits that come from a Bi-Weekly mortgage vs Standard Mortgage:

Standard Mortgage:

• $200,000 loan with a 6% interest rate
  

Monthly Payment:	$	1199.10
Total Int.:	$	231676.38
Avg Int each Month:	$	643.55

Bi-Weekly Mortgage:

• $200,000 loan with 6% interest rate

Biweekly Payment:	$	599.55
Total Int:	$	180392.78
Avg Int each BiWeekly Period:	$	230.68

Principal Remaining
Year#	Standard	Biweekly
1	$197543.98	$196264.34
2	$194936.47	$192298.76
3	$192168.14	$188089.12
4	$189229.06	$183620.40
5	$186108.71	$178876.64
6	$182795.91	$173840.93
7	$179278.77	$168495.29
8	$175544.71	$162820.65
9	$171580.34	$156796.76
10	$167371.45	$150402.13
11	$162902.97	$143613.93
12	$158158.88	$136407.95
13	$153122.19	$128758.48
14	$147774.85	$120638.21
15	$142097.69	$112018.17
16	$136070.38	$102867.61
17	$129671.31	$93153.87
18	$122877.57	$82842.30
19	$115664.81	$71896.09
20	$108007.17	$60276.19
21	$99877.23	$47941.13
22	$91245.86	$34846.91
23	$82082.12	$20946.79
24	$72353.17	$6191.18
25	$62024.17	$0.00
26	$51058.10	$0.00
27	$39415.67	$0.00
28	$27055.16	$0.00
29	$13932.27	$0.00
30	$0.00	$0.00

Not only are you saving yourself 5 years, but you're also saving yourself over $51,200 in interest! So remember, Bi-Weekly is the way to go. If you're interested in one...let me know.