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Looking to Pay Back Your Mortgage Faster? Three Reasons to Consider Switching to Bi-weekly Payments

Looking to Pay Back Your Mortgage Faster? Three Reasons to Consider Switching to Bi-weekly PaymentsWhile there are differing schools of thought when it comes to whether or not a person should pay off a mortgage before the loan term ends, there may be some benefits to making payments on a bi-weekly basis as opposed to monthly basis. What are some of the reasons why it may be beneficial to make two payments a month instead of one? Here are three reasons why you should ditch the monthly fees and make payments once every two weeks.

You’ll Make An Extra Payment Per Year

If you’re looking to pay off your mortgage ahead of schedule, making bi-weekly payments means you’ll make an extra payment every year. Instead of making 12 large payments every year, you’ll make 26 small payments. These 26 small payments would be equal to about 13 large payments.

This is the equivalent of an extra payment per year and 10 extra payments over 10 years. If you have a 30-year mortgage, you could pay it off between two and three years early because you will make your last payment 30 months ahead of schedule.

You’ll Provide Yourself With Financial Flexibility

Making extra payments can provide you with financial flexibility that makes it easier to deal with unexpected expenses or a job loss. As you are making a half-payment every two week, you can make your payments in smaller, more manageable chunks.

It may be a good thing if you are self-employed and may not be sure when a client will pay for services rendered. Additionally, you may have your next payment reduced or advanced if you pay more than you owe in a given month.

You’ll Reduce the Amount of Interest Paid on the Loan

Paying off your mortgage faster reduces the amount of interest that you pay on the loan. Even if you only make one extra payment per year, you could still save thousands of dollars in interest by paying your loan several months or years early.

To determine exactly how much you will save, you can use an amortization table or calculator to see how much interest you pay over the full 30 years as opposed to taking only 27 or 28 years to pay for your home. It is also important to note that making extra payments adds to the equity that you have in the home.

Making two payments instead of one each month may help you achieve financial flexibility while building equity in your home. By paying off your mortgage as soon as possible, it may enable you to put more money into a savings or retirement account. Contact a mortgage professional for more information about whether bi-weekly payments are right for you.

What’s Ahead For Mortgage Rates This Week – Sept 15, 2014

Whats Ahead For Mortgage Rates This Week Sept 15 2014Last week’s housing related economic reports were slim, but an unexpected increase in weekly jobless claims gained attention. Analysts calmed concerns by noting that last week’s reading of 315,000 new jobless claims was not far removed from jobless claim levels before the recession. Expectations for last week’s reading were for 301,000 new jobless claims based on the previous week’s original reading of 302,000. The previous week’s reading was revised to 304,000 new jobless claims.

Jobless Claims: 4-Week Average for Continuing Claims Hits Lowest Level Since 2007

Prospective home buyers and current homeowners typically consider their jobs and employment prospects before seeking a home purchase mortgage or refinancing their existing home loans. Last week’s readings released by the Department of Labor suggest that while weekly jobless claims increased, overall trends in hiring and continuing jobless claims indicate a stronger labor sector.

The four-week average of new jobless claims rose from 303,250 to 304,000. The four-week average is typically less volatile than week-to-week readings. Continuing jobless claims increased by 9,000 to 2.49 million for the week ended August 30. The four-week average for continuing jobless claims fell by 15,500 claims to 2.50 million continuing jobless claims. This was the lowest reading for continuing jobless claims since 2007.

In other labor related news, job openings were nearly steady at 4.67 million in July against June’s reading of 4.68 million new job openings. The Labor Department reported that job openings increased by 22 percent year-over-year, with private sector jobs rising to 4.19 million job openings and government jobs increasing by 101,000 job openings to 485,000 in July. The number of hires in July rose from June’s reading of 4.79 million to 4.87 million in July. This was the highest number of hires since 2007. Pre-recession hiring levels were approximately 5 million; this suggests that U.S. labor trends are approaching pre-recession levels.

Mortgage Rates Rise, Discount Points Unchanged

Freddie Mac reported higher mortgage rates on Thursday, with average discount points unchanged at 0.50 across the board. Average rates for a 30-year fixed rate mortgage rose from 4.10 percent to 4.12 percent; the average rate for a 15-year mortgage was two basis points higher at 3.26 percent and the average rate for a 5/1 adjustable rate mortgage rose to 2.99 percent from the prior week’s average of 2.97 percent.

What’s Ahead

This week’s scheduled news includes several reports related to housing. In addition to Freddie Mac’s usual mortgage rates report, The National Association of Home Builders (NAHB) will release its Housing Market Index and the Department of Commerce will release data on housing starts in August. General economic reports include the Consumer Price Index, Core Consumer Price Index, and Leading Economic Indicators.

The Federal Open Market Committee of the Federal Reserve will release its post-meeting statement on Wednesday, and Fed Chair Janet Yellen is also expected to give a press conference. The Federal Reserve may provide further indication of its intention concerning the target federal funds rate, which is currently at 0.00 to 0.250 percent. The Fed may address its intentions concerning the federal funds rate, but the FOMC has been consistently vague about details concerning its economic strategy.

It’s Not Just Car Storage: How to Transform Your Garage into a Brand New, Highly Usable Space

It's Not Just Car Storage: How to Transform Your Garage into a Brand New, Highly Usable SpaceIn some homes, garages are used only for car storage. They may appear to be bare and without real functional use for homeowners. However, other garages may be an envy of the neighborhood – they may have floor to ceiling shelving systems, and they may be the picture-perfect image of organization.

With a bit of planning and creativity, you can turn your garage into a much more functional space. Here’s how you can make your garage the most useful space in the house.

Determine What You Need To Store

One of the most important steps to take when improving the functionality of your garage is to determine which items you need to store. The last thing you want is to invest in a shelving system or cabinets for your garage only to later realize that your belongings do not fit in the features you have purchased. Take an inventory of the items you want to put in the space as well as their sizes and dimensions, and then take stock of the space available to store these items.

Invest In Storage Features

There are numerous types of storage features that you may choose to invest in for your garage, such as cabinets, drawers, wall pegs, shelves, overhead storage features, and bins.

The best storage features for your garage are those that take into account your accessibility needs. For example, seasonal items that you may rarely need access to may be placed in overhead storage features that hang over the cars. On the other hand, screwdrivers and other tools that you may need to use more frequently should be placed in a more accessible area.

Consider The Look Of The Garage

Some homeowners truly do not care what their garage looks like, but you should keep in mind that this is a room that is revealed to the outside world each time your garage doors are raised. This can indeed affect curb appeal and others’ impressions of you. Therefore, think about investing in a full garage storage system rather than piecing together different items.

If your garage looks like a war zone, you are wasting valuable storage space and compromising your property value. Investing in aesthetically pleasing and highly functional storage solutions can turn your garage into a major selling point and a great multi-use space.

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