Bi-Monthly Mortgage
Usually, mortgages are paid on a monthly basis. However, there are some alternative payment schedules (See Also: Bi-Weekly Mortgage).
One of these other possibilities is a bi-monthly mortgage. Under this program, a homeowner pays half a mortgage payment two times a month instead of paying the full payment once. These plans often come with lower interest payments, so the mortgage borrower ends up paying less over the course of the loan.
However, programs like these have to be set up with the lender to get any savings. Merely splitting your mortgage payment in two on your own won't lead to any decrease in the interest rate. Unfortunately, some banks extract additional fees for setting up a bi-monthly plan, which eliminate any interest savings. Still, a savvy shopper can sometimes get a deal by finding a good bi-monthly option.
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Finance: What is a Mortgage?345 Views
Finance allah shmoop shmoop What is a mortgage Well people
a mortgage is just dead it's alone but one with
special tax treatment For most people simply put Any interest
you pay on a mortgage to buy a home is
tax deductible Morty morton's inputs down a hundred thousand bucks
to buy a home that costs four hundred big ones
his mortgages three hundred grand at five percent interest per
year So that's fifteen thousand dollars a year he pays
to rent the money from the bank which he uses
to buy his dream home with the loop de loop
waterslide Morty earns one hundred grand a year and pays
tax on his last fifteen thousand of earnings soas faras
The irs is concerned since morty can deduct his fifteen
thousand dollars in interest against his earnings he does not
in fact earn taxable wages of one hundred grand annually
Instead he earns taxable wages of eighty five thousand dollars
a year Essentially with government is doing is sharing in
some of the cost of renting the money Taub i'm
ortiz home well why would the u s government be
so charitable Well because home ownership has been integral part
of the american dream since the u s of a
i po'ed in seventeen seventy six easy access to mortgages
and then home buying can be a hugely beneficial asset
In the vast majority of cases homes create family stability
a store of wealth and tax dollars for local schools
in the form of real estate taxes So don't feel
bad about splurging on that water slide there Morty Just 00:01:42.93 --> [endTime] remember you're doing it for the kids Hello
Up Next
What's a second mortgage? Easy: it comes after a first mortgage. Hit play for more details.
With a reverse mortgage, payments go in the opposite direction of a normal mortgage, where you pledge your home as an asset, and receive $ each month.