Mortgage Cycling Versus Bi-weekly Mortgages

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With all the talk lately about Mortgage Cycling versus Bi-Weekly Mortgages which one is really right for you? Choosing the correct one could literally save you thousands of dollars and shave off approximately 20 years on the life of your 30 year mortgage.

So, a little background on the principal of each program needs to be told. Bi-weekly mortgages became popular a few years back when interest rates were extremely high and it made a lot of sense to pay as much on the principal of your mortgage as you can in a systematic way.

The way it works is that your mortgage payments are split in two every month so you end up paying (26) 1/2 payments instead of 12 whole payments which in effect ends up paying one additional month towards your principal.

Doing this ends up saving the average homeowner thousands of dollars on the interest payments over 30 years and shaves off around 7 years of payments. Not bad for back then. But as interest rates started to drop the net effect of savings are not as great now as they were when rates were higher.

But with the discovery of a recent mortgage loophole by Craig Romero, a senior mortgage analyst, Mortgage Cycling was born. Mortgage cycling allows a homeowner to build up 10 times faster then biweekly mortgages and allows you to pay of your 30 year mortgage in 10 years or less.

Mortgage cycling allows a homeowner to build up equity in their home fast using a patent pending technique. So fast, it ends up paying off a traditional 30 year mortgage in just about 10 years.

At first I was skeptical on how powerful mortgage cycling is until I compared using a typical $150,000 loan for thirty years at 7% interest. After running the figures though the difference between a bi-weekly mortgage versus mortgage cycling is dramatic.

Equity using a Bi-weekly Mortgage verusMortgage Cycling

Equity 1st year $1,520$14,061 Equity 3rd year $4,900$44,972 Equity 5th year $8,787$74,179 Equity 9th year $18,397$136,429

No matter the loan amount, interest rates or mortgage terms, mortgage cycling showed to dramatically cut down the payment time and interest payments to your mortgage company over the life of the loan.

Imagine what you could do with all that extra money that you can put back in your pocket instead of your mortgage company.

Now mortgage cycling may not be for everyone. But for someone who has the discipline it can be a very effective way of building up the equity in your home and to pay it off extremely fast versus using a standard bi-weekly option.

By: Ted Kushner

Ted Kushner writes about consumer issue topics of interests. If you would like to learn more about Mortgage Cycling and how it can reduce your 30 year mortgage to just 10 years visit:

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Bradesco First-Quarter Net Rises 11% on Lending, Fees (Update3)

Banco Bradesco SA, Brazil's second-
biggest non-state bank, said first-quarter profit rose 11 percent
on increases in consumer lending and revenue from fees and
insurance.

Net income climbed to 1.7 billion reais ($838.7 million), or
85 centavos a share, from 1.53 billion reais, or 78 centavos, a
year earlier, Osasco-based Bradesco said today on the Brazilian
securities regulator's Web site. The result compared with the
1.68 billion reais estimate by Bruno Pereira, an analyst at Banco
UBS Pactual SA.

Bradesco, which has made at least 19 acquisitions in six
years, is taking advantage of increasing demand for consumer
loans as lower interest rates and higher wages prompt purchases
of cars and home appliances. Bank lending in Latin America's
largest economy surged 21 percent in the year ended March 31.

``Bradesco was the bank that invested the most in credit
expansion,'' said Regis Abreu, who helps manage about $739
million at Mercatto Gestao de Recursos in Rio de Janeiro. ``In an
environment of declining interest rates, Bradesco is in the best
position among non-state banks to capture this credit demand.''

The bank's shares have gained 5.2 percent this year,
trailing the 14 percent increase in the benchmark Bovespa Index.
It has a market value of 89.7 billion reais.

Lending Grows

Bradesco's loan portfolio, including receivables from credit
cards, increased 25 percent to 122.4 billion reais in the quarter
from the year before. Excluding receivables from credit cards,
the portfolio increased 20 percent to 101.5 billion reais. Loans
to individuals gained 17 percent, spurred by demand for personal
loans and auto finance. Corporate loans grew 23 percent.

Adjusted net interest income advanced 0.9 percent to 5
billion reais.

Household monthly income, adjusted for inflation, rose 5
percent in March from a year earlier. Monetary policy makers in
Brazil cut the benchmark lending rate for a 15th straight time
last month to boost growth. The rate reached a record low of 12.5
percent in April from 19.75 percent in September 2005, when the
current series of rate reductions began.

``Lending activity will be higher in 2007 and 2008; however,
we expect the margin to be lower because of increased competition
in the market,'' Jose Guilherme Lembi de Faria, Bradesco's
managing director, said in a May 4 interview. ``We have to be
much more aggressive to keep our market share, to keep our
volume.''

Return on Equity

Bradesco expects loan portfolio to expand 20 percent this
year, Lembi de Faria said.

Provisions for bad loans rose to 1.16 billion reais in the
first quarter from 938 million reais in the year-earlier period,
Bradesco said.

Brazil's economy is projected to grow about 4 percent in
2007 and in 2008, according to the median estimate of economists
in a central bank survey published today. The average growth rate
from 2003 to 2006 was 3.4 percent.

Bradesco posted an average annualized return on equity, a
measure of profitability, of 30.2 percent in the first three
months of the year, down from 34.6 percent in the year-earlier
quarter. The return on equity this year will probably be in line
with the 32 percent posted in 2006, Lembi de Faria said.

The bank's mortgage portfolio reached 669 million reais in
the first quarter and should drive credit expansion in coming
years, Lembi de Faria said.

Fees and Commissions

``We expect the mortgage business will boom very soon in
Brazil,'' Lembi de Faria said. ``We believe there is potential
demand for 3 million houses financed in Brazil, especially for
the median to low income population.''

The bank's fee and commission income grew 25 percent to
2.559 billion reais. Net income at the insurance business rose 15
percent to 529 million reais.

Eleven of 17 analysts who cover Bradesco have a ``buy''
recommendation on the stock, while six have a ``hold'' rating,
according to data compiled by Bloomberg.

Banco Itau Holding Financeira SA, Brazil's biggest non-
government bank by market value, will release first-quarter
earnings tomorrow.

To contact the reporter on this story:
Telma Marotto in Sao Paulo at
.