How To Enjoy Advantages Of Biweekly Mortgage Loans
A Biweekly mortgage is also known as biweekly mortgage, biweekly loan or bi-monthly mortgage. In Canada, bi-monthly, bi Quarterly, semi-annually, and annual payment forms are available. Mortgage lenders in Canada offer many options to the mortgage borrower. Bi-week mortgages have become very popular in the United Kingdom and United States. In the United States and United Kingdom, some bi-week mortgage products exclude the second month. In Canada most mortgage products come with the option of choosing whether to include the second month.
The biweekly mortgage is meant for borrowers who are not able to handle their financial responsibilities with a regular monthly payment. Borrowers with good credit standing can choose bi-weekly mortgage for their home loan. This is because bi-week mortgages are considered to be a short term loan. This means that the interest rate, which is variable, will be adjusted bi-annually. The repayment schedule means that the borrower will have a responsibility of making the payment for only thirteen half payments instead of the normal monthly payment of 26 half payments.
In order to find the biweekly mortgage product for borrowers, they should go through a mortgage broker. The mortgage broker will help the borrowers to find the best type of product that suits their requirements. One of the factors that the brokers look into is how much extra payment per year the borrowers can pay. If the borrowers fulfill all their other financial obligations earlier than the date when they apply for this kind of mortgage, then they can save money. For example, if the borrower has three credit cards, they can pay off their card debt earlier and thereby reduce the amount that they need to pay per year.
The biweekly mortgage loan offers a borrower the choice to pay the balance in full every two weeks or in half. If the borrower chooses to pay the balance in full, then they will enjoy twelve months of completely amortized payments. If they choose to pay the balance in half, they will get twelve monthly payments and two bi-annual adjustments to the interest rate. However if they go for the full payment option, they will get their mortgage loan renewed for twelve consecutive years.
It is true that biweekly mortgage offers a borrower a lot of flexibility and they can set their own terms and condition. However, if the terms and conditions are not right, it can cause financial losses for them. For example, if they put an extra money payment on their house, but forget to make the payment on the due date, it will result in a default. Hence, borrowers should make sure that the conditions of their biweekly mortgage loan are in their favor.
Another common problem that borrowers encounter with biweekly mortgage loans is that they miss their monthly payments because of forgetfulness. If the borrower forgets to make payments every two weeks, it is advisable for them to put in writing their due date and the date when they are going to make their payment. This will prevent them from missing out on their biweekly mortgage loan. They should also make sure that they budget accordingly and avoid unnecessary expenses.
Another way that borrowers can enjoy more benefits is by changing their repayment plans. Borrowers who prefer to pay the full amount every two weeks should consider changing their payment plans to biweekly mortgage refinance packages that offer them extra payments every other month. The extra payment per year will help them save money on interest costs and they will be able to reduce their debt burden. However, borrowers should remember to make their first payment on the first of every month so that they do not skip any due date.
Those homeowners who would like to have extra payments every other month should opt for biweekly mortgage refinancing packages that offer them interest-only payment plans. This will help them to have a lower interest rate and a lower principal balance. They just have to make their payment once a month and they will only have to pay a portion of their principle. This can help them reduce the cost of their mortgage refinancing.