Frank Williams, Broker Associate, ABR
Phone
(312) 933-8072
E-Mail Us
Sudler Sotheby's International Realty
47 West Polk Street
Chicago, IL 60605


 
 
Chicago Illinois Homes For Sale, Chicago IL Real Estate
Questions & Answers
Get the answers on home selling and buying.
  Prepayment - Q & A
Q:  What about splitting my mortgage in two and paying bi-weekly?
A:  Some people set on paying off their home loan early and reducing interest charges opt for a biweekly mortgage. Monthly payments are divided in half, payable every two weeks.

Because there are 52 weeks in a year, the program results in 26 half-payments, or the equivalent of 13 monthly payments per year instead of 12. Using the biweekly payment system, a homeowner with a $70,000, 30-year biweekly mortgage at 10 percent interest could save $60,000 in interest and pay off the balance in less than 21 years.


Q:  What are the benefits of pre-paying the mortgage?
A:  By making additional payments that go toward the principal balance, you can save thousands of dollars and shave years off the length of your loan.

Principal payments over and above the minimum monthly amount required by the terms of the mortgage constitute partial prepayment of a mortgage. Each mortgage will have terms describing how and when prepayment may occur. Refer to the note to see if there is any penalty incurred for prepayment.

The total savings potential also depends on how long you want to stay in the house. Borrowers who plan to move in the near future should not expect to realize as significant a savings as people who pay ahead of schedule until they own the home free and clear.

Check with your lender, who should be able to provide specific answers as to how such a prepayment plan will shorten the life of the loan and what kind of interest savings can be expected.



Copyright 1999 Inman News Features


Preferred Partners
Check out the best in local home-related services.
Automated E-mail Listings Service
Sign up to automatically receive new listings today!
Home Advice
Get the answers on home selling and buying.
Real Estate News
Find out what's happening in real estate.
 
  Articles
   West Loop Real Estate
Hyde Park - Kenwood Homes For Sale
About Bronzeville
Refinancing
Leveraging Your Money
Length of Your Mortgage
Real Estate Buyer's Agent Council
Bolingbrook Homes
Saving for the Down Payment
Closing Costs
   How Mortgage Loans Work
Adjustable-Rate Mortgages
How Much Can You Afford?
Getting Your Finances in Order
Your Credit History
Mortgage Glossary
Free CMA Request
Resources - Homes in Other Areas
Relocation Resources

main page
search for homes
our listings
Home Evaluation/CMA
Chicago ZIP CODES
mortgage center
Chicago Home Loans
contact me
free reports
Daily Interest Rates
Frank Williams, Broker Associate, ABR
Phone
(312) 933-8072
Sudler Sotheby's International Realty
47 West Polk Street
Chicago, IL 60605
 

Homes.com Copyright ©2000-2006 Homes.com, Inc. All Rights Reserved. Privacy Policy. Full Terms and Conditions.
HOMES.COM is one of the largest Internet real estate sites with hundreds of thousands of homes for sale and apartment rentals with photos, descriptions, and relocation services. The advertisers and publishers are not responsible or liable for misinformation, misprints, or other errors. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental.

Equal Housing Opportunity

Member Login