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Alternative Options For Homeowners
to Win with Rising Interest Rates

As interest rates rise from record lows, homeowners once again face finding viable options to reduce the amount of interest paid on their home loans. The rush to refinance provided the opportunity to take advantage of low interest rates to borrowers who have good to excellent credit. That helped to reduce their monthly mortgage payments, which was the only benefit provided by the lowered rates.

The one option that still eludes most homeowners, and is recognized and supported by financial and government organizations including Fannie Mae, is Biweekly Equity Acceleration.

This industry has made great strides to become a viable tool to help homeowners reduce their mortgages, while building equity in their homes up to three times faster. Biweeklies provide another important benefit versus refinancing; it allows the loan to be paid off sooner than the original stated term.

A mortgage company will not accept a half payment except by special arrangement, and this sort of arrangement is rare. To begin a Biweekly Equity Acceleration Program the homeowner deals with a service provider like Consumer Mortgage Reduction Service, or another company. There are about 30 companies in the United States that specialize in biweekly equity acceleration, and they provide mortgage reduction services directly to the homeowner. These programs are easy to initiate and do not require refinancing, just complete a few short sign-up forms, and the biweekly company takes over from that point.

The process does not change your current mortgage arrangements, just the way your payments are made. Instead of one monthly payment, you pay one half of the regular monthly mortgage amount every two weeks.

The benefit of this arrangement is that you can budget your lower payments - only half of the normal mortgage payment - every two weeks. Since there are 52 weeks in the year, you will make 26 payments. That means you make one extra full monthly payment every year resulting in a real reduction of the principle you borrowed. The more you can reduce the amount your really owe, the less interest is paid over the life of the mortgage! These biweekly payments are automatically deducted from your checking or savings account, and applied to the mortgage loan. They reduce the principle amount owed every six months when that extra biweekly payment is made.

Today's consumers are, more than ever, trying to reduce the amount of debt they have. This is evident by the rapid rise of Debt-Consolidation companies, but the largest debt a consumer has is the home mortgage. The majority of homeowners overlook this fact when planning to reduce their debt. The use of biweeklies can decrease your home loan substantially, in a shorter period of time, usually cutting the time it will take to pay your mortgage in full by six to ten years.

With rising interest rates, trying to reduce debt load, including the mortgage, will become a bit more difficult without taking advantage of biweekly programs. A 30-year fixed rate mortgage for $150,000 at 6% interest would be paid off 6 years earlier, and could save the homeowner up to $30,000 in excess interest payments. The amount of time and interest saved depends upon the amount of the loan, and the interest rate.

Interest rates have become a great concern for homeowners, and those who may be contemplating purchasing a new home, but with alternatives to rising rates like biweekly equity acceleration programs, these concerns can be eased. If the average homeowner can save money per year in any interest rate environment, then the use of biweeklies provides a solid foundation to the purchase of a new home.

More resources from around the Web:

Paying Off Your Mortgage

Should You Pay Off Your Mortgage?

When Your Home is On the Line