If you pay your Arizona mortgage on a bi-weekly basis, you can save money on the interest because you would be paying your mortgage balance off five years sooner. By paying twice a month, you end up paying an extra mortgage payment per year because there are 26 bi-weekly payment periods a year. Some borrowers like this idea especially if they get paid bi-weekly. You may have to pay an extra fee to do this so check with your lender to make sure they will allow you to do so. Not all lenders accept bi-weekly payments.
Also, this strategy is only helpful if you have enough income to cover your other debts. So if you need money for your credit card debt or your car payment, then make sure you put that money aside as well and anything that is disposable after all your bills are paid could go towards your extra mortgage payment. This strategy also works better if you have a high rate on your mortgage. If you have a low interest rate, then you may want to use your money or invest it in something else. Paying your mortgage off sooner, relieves financial stress so if you can do it, then it’s a good idea. Then you can focus on your college tuition expenses if you have kids or put money away for your retirement.
The other thing you can do is refinance later to a shorter term loan with a lower interest rate such as a 15 year fixed mortgage if you currently have a 30 year mortgage. You will save a bundle on the interest. However, keep in mind your monthly mortgage payment will be more expensive. Also, in order to refinance, you need equity in your home. In addition, if you are planning on refinancing, there is no guarantee that you will qualify for a refinance if you financial situation changes or your credit score is not high enough. To get the best refinance rates you need a score of 720 or higher.
Always talk to your lender or mortgage broker before you make any decisions regarding your mortgage. They may have some suggestions that you might not know about or thought of to help you lower your principal balance and pay your Arizona mortgage off sooner or to save you money on the costs of your loan. Your Realtor can refer you to an Arizona mortgage broker if you need one. Always work with a reputable broker to find the best Arizona mortgage rates.
If you have any questions about this or if you have any questions you’d like us to answer on our podcast, you can email your questions to email@example.com or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.
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Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.
Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.BACK TO LIST