Some Mortgage/Finance companies will allow you to pay your mortgage every two weeks instead of every...

Some Mortgage/Finance companies will allow you to pay your mortgage every two weeks instead of every month. Will this method help your friend to pay off the mortgage more quickly and if so why or why not?

Expert Solution

Payment of mortgage on monthly basis and weekly basis make a huge difference among the both.
Such payments which are made on monthly basis will require more time in full payment then the payments made on weekly basis.

In the given case where some Mortgage/Finance Companies allows you to pay your mortgage every two weeks instead of every month will reduce the time period of whole payment.
This method will surely help you to pay off mortgage more quickly as compared to monthly payments. This is so because weekly payments (in this case every two weeks instead of every month) will reduce the whole time period and overall interest.

The overall time period will be reduced to half because every month have four weeks and the payment is made after every two weeks (which means two payments every month).

Hence, paying of mortgage every two weeks instead of every month will surely help in paying off mortgage more quickly.

ekkarill92 answered 2 years ago

You took out a mortgage for $300,000. You need to pay $2,730 every month for 15...

You took out a mortgage for $300,000. You need to pay $2,730 every month for 15 years. What is the monthly interest rate?

Suppose your annual income is $50,000 and your lender will allow you to have a mortgage...

Suppose your annual income is $50,000 and your lender will allow you to have a mortgage payment that is no more than 33% of your monthly income after making other debt payments and paying property taxes, which in your case amount to $500 per month. If the current 30-year mortgage rate is 5%, approximately how large a mortgage can you qualify for (assuming you have the required cash for the necessary down payment)? a. $160,000 b. $161,000 c. $162,000 d....

You buy a condominium for $300,000 and finance 80% of the price. Your mortgage has an...

You buy a condominium for $300,000 and finance 80% of the price. Your mortgage has an interest rate of 4% per year and a 30 year amortization. What are your monthly mortgage payments?

: After 4 years, you will pay 5.000 TL. Instead of this, you will pay 1000...

: After 4 years, you will pay 5.000 TL. Instead of this, you will pay 1000 TL now and the balance will be paid after 6 years. If the interest rate is %25, what is the amount paid after 6 years?

Do you agree with Canon’s decision to allow the two acquired companies to continue to operate...

Do you agree with Canon’s decision to allow the two acquired companies to continue to operate independently? What are the pros and cons?

You got a well-paying job in Finance and took out a mortgage for your house. It...

You got a well-paying job in Finance and took out a mortgage for your house. It is paid monthly. The amount you borrowed is $790,000, at a monthly rate of 0.5% for the next 30 years (360 months). 1 Use 0.5% as both the interest rate you are paying and the discount rate r. -Show an amortization schedule if this loan had constant monthly payments. How much do you have to pay every month? Show how much of these payments...

You wish to get a mortgage for $360,000. Your mortgage lender offers you a choice of two...

You wish to get a mortgage for $360,000. Your mortgage lender offers you a choice of two 15-year fixed-rate mortgages with monthly payments. Neither mortgage has a pre-payment penalty. Mortgage A has 0 points and the rate is 3.625%. Mortgage Bhas 0.727 points and the rate is 3.375%. You expect to pre-pay your mortgage after 5 years of payments. Which mortgage, A or B, offers the higher expected yield to the lender?

Explain the trade credit facility provided by some companies to their customers that allow them to...

Explain the trade credit facility provided by some companies to their customers that allow them to manage their day-to-day liquidity situation and calculate the opportunity cost of an invoice that specifies the following conditions, as shown below (a. – c.): a) conditions: 1.25/10, n/30. b) conditions: 1.25/10, n/60. c) conditions: 1.5/10, n/60

You are considering taking out an adjustable rate mortgage (ARM) to finance your new home and...

You are considering taking out an adjustable rate mortgage (ARM) to finance your new home and have been given the following information by the bank: $250,000 house price 80% Loan to Value 200 bps margin 2.5% LIBOR – Index for Year 1 Teaser Rate in Year 1 – 2% Periodic Cap – 1.5% Life Cap – 5% You also went on Bloomberg and found the following LIBOR Index projections for the next few years: 3% - Index for Year 2...

What key challenge faced by companies in the mortgage lending business, for example Housing Finance, would...

What key challenge faced by companies in the mortgage lending business, for example Housing Finance, would mortgage-backed securitization help solve?

Question