MWF Home Loan Trail Guide

Page 19

Getting More Out of Your Mortgage

Bi-Weekly Payments A bi-weekly mortgage is a mortgage in which one-half payment is made every other week instead of a “full payment” made once per month. The homeowner makes 13 payments per year instead of the usual 12, which accelerates the loan’s payoff schedule by up to 6 years. Paying Extra Towards Principal Paying a little extra every month on your home loan is a way to make that dream of owning your home free and clear a reality faster than you thought, and with today’s historically low savings rates, it could make more sense than ever. Rather than letting money languish in a CD, money market or savings account that pays practically nothing, many homeowners might be better served by paying down their mortgage. Doing so can save tens of thousands of dollars in interest and shave years off your loan. Our accelerated mortgage payoff calculator can help you figure out how quickly you can pay off your loan and how much you’ll save.

Getting More Out of Your Mortgage

Paying off your mortgage might sound ambitious, especially if you have recently purchased or refinanced into a 30-year term. But it’s still smart for homeowners to give some serious thought as to how they’ll pay off their home loan. An early mortgage payoff can net substantial interest savings compared to making scheduled payments for 15 or 30 years. Contact your home loan servicer to get set up on one of the options below.

Helpful Homeowner Tips Supplemental Taxes The supplemental assessment tax reflects the difference between the new assessed value and the old or prior assessed value. It is in effect from the close of escrow, can take up to 24 months before you receive the invoice and billed by the county controller/tax collector office. You will be responsible for this one-time supplemental tax bill, however, you will be given the option to pay in two equal payments. It is important to note that if you receive an escrow analysis refund check from your loan servicer, it would be in your best interest to hold onto those funds until after the county reassesses your property. HERO/PACE Information If you have been thinking of getting energy improvements (solar, new windows, etc) on your home, we know that many homeowners consider the HERO or PACE programs. This is a notice to inform our clients so that you can make informed decision when presented with these programs from contractors. Mountain West Financial does not offer HERO or PACE Loans. Downsides of PACE Loans (Property Assessed Clean Energy): • • •

PACE loans are secured by a priority tax lien against your property and payments are collected by t he real estate taxing authority. The PACE lien doesn’t always show up on the tax rolls right away leading to an under-collection of your escrow account which can translate to a higher monthly escrow amount due. PACE loans can be more expensive in terms of interest rates and fees (processing, annual a dministrative and prepayment penalties) than a conventional mortgage loan.

Complications when selling your home with a PACE/HERO lien: • •

Improvements may not result in a dollar for dollar increase to your home’s appraised value. Many lenders will not make a loan to the buyer if the lien remains intact. In many cases, the PACE l oan would need to be paid in full in order for the new buyer to purchase the home.

Talk to your attorney, ask repayment questions, research financing options and/or speak to a HUD approved housing counselor before making any final decisions.