We put down $200,000 to by a $400,000 home. So we asked for a $200,000 loan at an X interest rate. It was a loan to be paid off in 15 years. By the 15th year (we are currently in the 3rd year) we would have paid off 200,000 plus a LOT more money in interests. We are thinking about paying our house off this year. How does it work??? If we still owe 160,000, do we just make a check for 160,000 dollars, or do we have to pay the 160,000 PLUS the interest that would have been accrued in the next 12 years... THANKS!!!
2007-01-06 02:31:17 · 6 answers · asked by Brendi 3 in Business & Finance ➔ Renting & Real Estate
You don't have to pay the interest that would've been accrued over the life of the mortgage. You should check though to see if your mortgage has a prepayment penalty fee. Call your loan company to find out the exact payoff amount. If you've only had the loan for 3 years you will still owe almost $200000 unless you've been making higher monthly payments than required. In the first few years, most of your payments go to pay interest first, and only a small portion pays the principal. But anything over the allotted monthly payment goes directly to the principal. Ask your loan company for an amortization schedule and it will show you exactly how your monthly payments were applied.
2007-01-06 02:39:06 · answer #1 · answered by rosecitylady 5 · 0⤊ 0⤋
When you are ready to cut the check, call your mortgage company and ask them for the total payoff amount. They will give you a date & amount. Make sure the check arrives there by that date & your home is paid in full. Interest accrues daily & so you will be saving thousands & thousands of dollars.
2007-01-06 02:35:02 · answer #2 · answered by Anonymous · 0⤊ 0⤋
It depends sometimes there are penalties for early payments, you have to check with the people who you got your mortgage from to find out if you will be penalized and to get the exact amount of what you owe so you may pay off the remaining balance. If you will be penalized try to refinance your mortgage to one where you will not be penalized for paying early, then just pay off the debt that is owed.
2007-01-06 02:34:27 · answer #3 · answered by ♥♫♥ Crystal ♥♫♥ 4 · 0⤊ 0⤋
Most mortages only have the interest during the time you take to pay it. If you pay it off in full, the interest won't be added to it.
2007-01-06 02:34:28 · answer #4 · answered by ? 6 · 0⤊ 0⤋
No, you would not pay the interest. Call your lender and find out what your payoff amount is, and they will tell you the exact amount (it probably changes every day).
2007-01-06 02:33:53 · answer #5 · answered by Monkeyman 3 · 0⤊ 0⤋
You will pay MUCH less than 160k.
2007-01-06 02:33:42 · answer #6 · answered by Anonymous · 0⤊ 0⤋