The drawback becomes apparent simply by calculating the cost of additional interest payments, which can total thousands for a few dollars difference in mortgage payments. Bi-weekly payments Some people set on paying off their home loan early and reducing interest charges opt for a biweekly mortgage. Monthly payments are divided in half, payable every two weeks. Because there are 52 weeks in a year, the program results in 26 half-payments, or the equivalent of 13 monthly payments per year instead of 12. FHA, VA, Fannie Mae, and Freddie Mac loans There are programs available to help people purchase a home with less than 20 percent down.
Points Points are prepaid interest charges paid to the lender at the time of closing.
One point is equal to 1 percent of the total loan amount. The more points you pay, the lower your interest rate will be. Appraisals are necessary to assure the lender that the property is worth approximately the price you agreed to pay. An appraisal of an average house costs a few hundred dollars. Builders often include financing programs to help move more buyers into a project early on.