Weekly mortgage payments offer the advantage of paying off more of the mortgage balance per year, but may come with additional processing fees and difficulty managing frequent payments. Homeowners should carefully consider the costs and benefits before agreeing to a weekly payment structure.
While most mortgages require you to make a one-time payment every calendar month, there are other payment alternatives that may be of interest to homeowners. One of these alternative approaches is the weekly mortgage payment. Instead of 12 monthly payments per calendar year, the homeowner makes a series of 52 payments over the course of that year. There are advantages and some disadvantages associated with weekly mortgage payments, with the possibility of paying off more of the outstanding balance per year on the one hand and the difficulty of managing such frequent payments on the other.
One of the main appeals of weekly mortgage payments has to do with arranging payments in a more convenient way for homeowners who receive weekly paychecks. Rather than having to save up money over the course of the month to meet the larger monthly payment, smaller weekly payments allow you to consistently pay off a little more than your mortgage balance while still having some money left over each week. Some consumers find that smaller but more frequent payments are simply easier to manage and can be structured to coincide with the weekly payment date.
Another benefit of the weekly payday mortgage is the ability to pay off more of your outstanding mortgage balance over the course of the year. The weekly payment series actually adds four more weeks of payments applied to that balance than a standard monthly payment would allow. In theory, this means the homeowner is paying off the mortgage faster, possibly reducing the overall mortgage term by a few years and saving on loan interest.
While a weekly mortgage payment may be beneficial for some consumers, others may find that the approach isn’t as viable as a monthly payment approach. Some lenders will charge additional processing fees to handle the costs of more frequent payments. Those extra charges can offset the value derived from making weekly rather than monthly payments, meaning that the cumulative effect over the course of a calendar year is that mortgage balances aren’t reduced significantly.
Also, the weekly mortgage payment approach can be quite difficult to manage in the event of a sudden job loss. The frequency of due payments leaves little time to make alternative financial arrangements. Similarly, an illness that prevents an hourly worker from earning money for a couple of weeks could mean falling into arrears and receiving late fees that only exacerbate the problem.
Before agreeing to a weekly mortgage payment arrangement, homeowners should carefully review all costs associated with this payment structure and compare the amount of debt that is withdrawn annually versus the more conventional monthly payment schedule. You should also consider what actions the lender is likely to take if the landlord is out of work for several weeks, both in terms of fees assessed each week a payment is missed, and how many payments may be delayed before the lender chooses to start. the attachment procedure. Only after determining that the weekly mortgage payment schedule provides enough benefits to offset the potential disadvantages should the landlord accept the agreement and structure the mortgage with a weekly payment obligation.
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