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October 1st, 2009

Fannie Ends Bi-Weekly Mortgages, Still Ways to Save

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Fannie Mae announced last week that they will no longer guarantee biweekly mortgages loans. According to Announcement 09-29, “Due to a lack of demand and increased operational costs, Fannie Mae is retiring the biweekly payment mortgage product…”

A biweekly mortgage allowed borrowers to make mortgage payments every two weeks, instead of once a month. The more frequent payments resulted in a borrower’s ability to pay far less in interest over the life of the loan. Merely because Fannie is no longer buying these types of loans doesn’t mean that they’re gone from the market. Many private lenders run their own programs, so check with your lender to see if they are available.

Still Ways to Save

If you’re looking for ways to save money on your mortgage but aren’t in the market to refinance, we suggest that you look into prepaying your mortgage. A single one-time lump-sum prepayment in the early years of your mortgage can not only trim your costs, but it can carve years off your mortgage term. “One extra mortgage payment per year has almost the same effect on costs as a biweekly does,” said HSH VP Keith Gumbinger.

Even adding as little as $10 per month to your current payment can save you thousands of dollars in interest.

Below is a graph shows how much you can save by prepaying:

graph-prepay

Click here if you’re interested in ordering HSH’s booklet on “Prepaying Your Mortgage.”

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4 Responses to “Fannie Ends Bi-Weekly Mortgages, Still Ways to Save”

  1. NevadaTee (Theresa Bastron) Says: October 2nd, 2009 at 3:41 am

    Fannie Ends Bi-Weekly Mortgages, Still Ways to Save – http://blog.hsh.com/?p=6086

  2. » Mortgage and Rates Notes & Comments Says: October 7th, 2009 at 4:44 pm

    [...] Biweekly mortgage products to end at Fannie Mae.  There are other ways to reduce mortgage interest and/or shorten your time to payoff.  Give us a call to talk about them. [...]

  3. Biweekly Mortgage Calculator | Mortgage Capped Says: December 28th, 2009 at 2:58 am

    [...] Fannie Ends Bi-Weekly Mortgages, Still Ways to Save | HSH … [...]

  4. Biweekly Payments Says: March 4th, 2011 at 1:17 am

    Most people that attempt to make biweekly payments on their own don’t stick to the plan. When they setup the payments on automatic debit, it’s a more disciplined approach.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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