What is a bi-saver mortgage?

by Matt Killikelly

A bi-saver takes an existing loan and essentially forces the borrower to pre-pay principal toward a loan in order to shorten the term.

There are two issues I do not like about bi-savers. First, bi-savers usually have a fee attached, anywhere from $200-$600 yearly for the servicing. The second issue is the way they are sold -- most customers don't realize that it's not the fact that the payments are made bi-weekly that makes them save more, it's the fact that by paying bi-weekly the client actually pays more money towards their mortgage over the year and that's what makes the savings.

Tags: mortgage pmi bisaver amortization

Avoid PMI - Private Mortgage Insurance

By Matthew Killikelly

Home ownership is synonymous with the American Dream. Yet, the road to home ownership has become harder to travel in recent years as home prices increase faster than the average buyer can accumulate their required down payment and closing fees. Thus, many consumers find it increasingly difficult to accumulate enough money for the traditional 20% down payment and 3-5% closing costs required to purchase a home. Hence a $200,000 purchase would require as much as $50,000 for down payment and closing fees with the buyer required to retain a reserve of several thousand dollars after the transaction as a safety net. With the increased cost of living it's harder than ever to hit such numbers.

Tags: mortgage pmi insurance