Mortgages - Crunch Your Numbers

#21 07/18/04, 12:43 PM

http://www.fema.gov/nfip/myth.shtm

From this FEMA site, you get the impression that they can't suddenly require it in the middle of a loan, (2nd question on the page), but if you re-finance, and even if you remodel beyond a certain dollar amount (if you click "Ask the expert" on the left side of the page), then the bank can require it. So I guess it would be prudent in future to check on that sort of thing before re-financing, if you could. This site also explains how they calculate the probability of a flood. What I was surprised at was that they calculate it over the entire 30-year period of the mortgage, when many stats show that most people move every 5 years.

Supposedly you can appeal it within a certain timeframe, for a fee to FEMA, but I have no stats on how many are successfully overturned. Also I am not sure if, since the flood insurance is backed by the government, it should cost exactly the same regardless of where you get it....

angus_guy · #22 07/19/04, 02:01 PM

Quote:

Originally Posted by chickflick

There seems to be a little misunderstanding.. THE POINT of paying every two weeks, IS that once a year, you'll have enough money to make ONE EXTRA MONTHLY payment. (Particularly, since most workers get paid bi-weekly rather than monthly)

THAT will then knock down the mortgage a little faster when it is put on Principal. Just keep track of it yourself.. pay monthly as usual, THEN when you have that extra payment saved up, send it in as a Payment to PRINCIPAL.

Paying on the Principal is the key. It brings down your balance SOONER, i.e. faster, thereby eliminating the REAL cost of your DEBT.. the INTEREST!!!
.

By paying bi-weekly you are right you are paying 26 -half payments or 13 full payments a year ............ the 26 halves actually pays a little quicker because of the fact that you do not have their money as long (1/12 of the payment was made at the beginning of the year)

angus_guy · #23 07/19/04, 02:27 PM

for an example

if you a $100000 30 year traditional mortgage at 9% you would pay 224,469.00 in INTEREST

if you paid biweekly you would pay 189,551

WOW

#24 07/19/04, 04:32 PM

Please don't get sucked into one of these bi-weekly programs where you have to pay an up-front, non-refundable fee, in addition to a fee tacked onto every single payment. Just add 1/12 of a payment to each monthly check. All the benefit of a bi-weekly, no extra fees, and you have the flexibility of skipping the extra portion when finances dictate.