Is there such a mortgage called a bi-weekly mortgage where you pay half of your monthly mortgage amount every two weeks?
Is there such a mortgage called a bi-weekly mortgage where you pay half of your monthly mortgage amount every two weeks? I heard the benefit of this mortgage is that you can cut the life of the loan by several years. Is this true?
There are many people that make bi-weekly mortgage payments, but there are several things to consider when considering this option. A bi-weekly mortgage payment benefits you by allowing you to pay off your mortgage more quickly (several years in some cases) than you would in a traditional mortgage, which can save thousands in interest. It does this in two ways. First, by making bi-weekly mortgage payments, you will make 26 half payments a year (in a 52 week year) instead of 12 full payments in a traditional mortgage. Effectively, you are making one additional mortgage payment a year. Second, the first bi-weekly payment each month is typically credited to your balance in the middle of the month, instead of at the end of the month, which reduces balance more quickly and the interest that you owe.
Before making bi-weekly mortgage payments, remember to check that each bi-weekly payment will be credited immediately to the balance of the loan (and not credited at the end of the month).
If you are looking to refinance your first mortgage, Bills.com makes it easy to compare mortgage offers and different loan types.
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Mortgage market update: the latest
No surprise that mortgage rates fluctuate. If you are thinking about purchasing a home or maybe considering refinancing your current mortgage, then you want to be up to date on mortgage rates.
Mortgage rates November 8, 2023
According to Freddie Mac, the 30-year mortgage rate for the week of November 8, 2023 stands at 7.50%. This 26 basis points decrease from the previous week's rate.
Additionally, Freddie Mac reports that the 15-year mortgage rate for November 8, 2023 is 6.81%, indicating a 22 basis points decrease from previous week’s rates.
Note: A basis point is equal to one-hundredth of one percent (0.01%). In numerical terms, if the mortgage rate changes by 20 basis points, it means the rate has changed by 0.20%.
What does the mortgage rate mean for you?
Mortgage rates play a vital role in determining your monthly payment. Let's take a look at the avergage interest rates (APR) for November 14, 2023 based on Zillow data for borrowers with a high credit score (680-740) in the United States:
- For a 30-year conventional loan, the interest rate is 7.61%.
- If you opt for a 15-year conventional loan, the interest rate stands at 6.74%.
Using the rates mentioned above, a $279,082 30-year-year mortgage would result in a monthly payment of $1,972. On the other hand, a 15-year mortgage would require a monthly payment of approximately $2,468.
Simplify your mortgage journey: Shop around and get pre-approved today!
To make the home-buying or refinancing process a breeze, we highly recommend shopping around for mortgages and getting pre-approved. So, why not Check Out mortgage rates now for the best options available.