How Many Mortgage Payments A Year Can The Borrower Make

A simple reading on the provisions of a mortgage contract can elicit several questions, for example, on the total number of payments that the borrower is allowed to make. Can he or she make 24 mortgage payments despite the provision that he should pay once a month? The other follow up question then perhaps could be how often the lender credits the payment of the borrower towards his account. The answers to these questions can have a great bearing on the running balance of the borrower’s account. If the lender credits the account on the date the money was paid, then his account is probably updated. But is an early payment considered? If so, then can the borrower pay his debt sooner than the term of his mortgage.

It is believed that the borrower can make as many mortgage payments as possible a year unless it is barred in the mortgage contract. The only problem is why he should pay more than what is stipulated when the lender does not credit his payments on the date it is made. If the contract is not flexible (it accepts overpayments and does not credit them) then there’s no point in making overpayments. The borrower will be losing an opportunity to gain extra money he pays while the lender gains more by accepting and using the money of the borrower without paying a single cent.

On the other hand, if the lender is flexible and allows the overpayment and credits it to the borrower’s account, then that is a very fair arrangement. The borrower can save a lot of money in terms of interest. He can shorten the mortgage term by making regular overpayments. If this is allowed under the mortgage contract, then there are no limits to how many mortgage payments a year the borrower make can. He can make as many payments as he can and have them credited to his account on the same day they were paid. This is great news for borrowers who are lucky to have negotiated mortgage loans.

Flexibility

A mortgage contract that provides unlimited overpayment is definitely a flexible mortgage. This is a kind of mortgage loan that is truly revolutionary in the field of lending. It will not only ease the burden off those who wish to settle their mortgages as early as possible but save them a lot of money on interest expenses.

This is a perfect fixed rate mortgage loan to start at a 15 year long loan to enjoy lower rates. A regular overpayment on a monthly basis could shorten the term of the loan by half. This will be more beneficial to the borrower if the lender makes adjustments to the interest and crediting of the loan payments. In a very short period of time, the borrower can have the total equity over the property in his own name. If he needs a remortgage to secure extra cash or if he wishes to purchase a second home, it is no longer a problem. The benefits of having a good credit standing will be in his favor as he paid his account before it matured.

There will be no limit how many mortgage payments a year can a borrower make on his mortgage if the lender allows the mortgage contract to be flexible along these lines.

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