If I take out a 30 year mortgage but I pay the house off before 30 years.......?

Question

If I take out a 30 year mortgae but I pay the house off before 30 years do i still hae to pay the intrest for a 30 year mortgage?

I just want to be safe and get a 30 year but I should be able to pay the house off way before that...

thanks

I wouyld like a 30 year mortgage just incase i loos my job or something like that. I just want to be safe...thanks

Answer 1

No. Some mortgages in some countries have a prepayment penalty for the first few years, usually because they give you a discount on the interest for the first year or two. But oustside of that you can always pay off a mortgage early. As you do if you sell up and move.

Answer 2

You have to make your full mortgage payment every month. However in addition to your payment you can pay any additional amount you want to be applied to the principal every month. The more you pay the more time you knock off your mortgage and the less interest you will pay.

Have your bank print you off an amortization schedule. It will show you a break down of your payments every month, starting with your first payment - how much goes to principal, how much goes to interest and what your balance is after each payment. You'll see that over the course of roughly the first half of your loan you are paying mostly interest with a tiny bit going to principal.

If you want to be able to keep track of what your paying and what's due, look at the amortization schedule and pay your payment, then look at the next month and see what the principal is. If you can swing it, pay the principal payment for the next month and you will have saved the corresponding interest. You'll see when you get the schedule. You can pay as much as you want toward the principal, just remember to keep track of what you paid, maybe even by paying with a separate check for the principal payment. Then make sure you keep those cancelled checks for your records.

You really can save a lot of money. Good Luck

Answer 3

First thing you should ask is if there is a penalty for paying off your mortgage early. Some lenders do that but most do not. If there's no penalty you'll save a lot of money by paying off the loan early. You can also have your payment schedule set up where you make payments every 2 weeks instead of monthly. You'll pay the same amount but it will be divided into half. You'll end up paying less interest by doing this. Good Luck!

Answer 4

One of my college professors said to NEVER pay off a 30 year loan faster (in a finance section of a class at University of Michigan's MBA program). If you have the extra money set up an interest bearing account that will make that money worth more than the low amount of interest payments you will save by paying off the house sooner. This account will make more money than you can save your way.

The rates on borrowing the money are less than the interest rates on investing or saving the money. It''s that simple.

Answer 5

it depends which mortgage company you choose and what kind of mortgage you get. Ask for a 30 year mortgage where you can prepay principal without penalty and where the prepayment is applied to the ourstanding principal in the year that it is paid. The company may charge you a slight premium, but you can make it up in interest savings fairly quickly.

Answer 6

Why would you want a 30yr mortgage if your going to be paying the house before 30yrs. You should get a 15yr or 10yr or 20yr mortgage. Even if there isn't a prepay you will have to pay interest for the full 30yrs. No one pays the house off in the 30yrs.

Answer 7

Balance what you will pay in interest less what you will lose in tax deductions. If it is a low interest loan it usually makes more sense to put that money into the stock market than to pay off a mortgage. Also be certain you pay off other obligations (credit cards, etc) first.

Answer 8

You will only pay what is occurred while the loan is active. Allow me to explain : You take a loan out for $500,000.00 and your payment is $1,500.00 but you are sending $3,000.00 each month the $1,500.00 extra is paid to the balance and not the interest or taxes or insurance it is applied directly to your loan. If you were to do this each month in 13 years and 1 month your loan would be paid in full and as long as you loan has no prepay charge you should be fine. I hope this help you good luck and best wishes to you.

Answer 9

The mortgage ends as soon as you've paid it back in full. Just make sure you read the fine print - they *can* impose a limit on how much you can pay back above the usual monthly amount.

Answer 10

any extra money you will apply towards your monthly mortgage will lower amount of interest you will pay over time you will pay off your mortgage and your APR will be lover. $100 a month extra make a huge difference with mortgage payments.