I'm not getting the greatest interest rate for a home I'm closing on Friday. I understand that at least the first 10 years are primarily for the interest. So, my issue is this... if I pay aggressively toward the principal even so much as 1k extra per month for the next 4 years and be able to pay large chunks in increments, then I will beat all of the interest right? I hope that makes sense yall.
2007-01-24 10:42:13 · 4 answers · asked by greatdame53209 1 in Business & Finance ➔ Renting & Real Estate
If you can afford to do that then go for it. Stick it to the man.
2007-01-24 10:46:15 · answer #1 · answered by CctbOh 5 · 0⤊ 2⤋
If you pay only 1 and 1/2 payment per month you can knock off 5 years from your total term. So the more you pay on the principal in "regular" increments the sooner your mtg will be paid and yes save you big $$$$ on the interest! Good luck!
2007-01-24 10:49:45 · answer #2 · answered by Badkitty 7 · 0⤊ 0⤋
Check your loan documents, look for a Prepayment Addendum. Most mortgages have them & they'll kick you in the butt for paying down the principal too soon. On most of the loans I have done, it's a charge of 6 months interest if you pay more than 12% toward the original principal amount within the first 3 years.
2007-01-24 10:46:44 · answer #3 · answered by Solstice 3 · 0⤊ 0⤋
I purchased my home with a mortgage. I paid off the mortgage in four years. I am glad I did. My net worth has increased dramatically after paying off the mortgage. It was like getting a $5,000 pay raise after I made the last payment.
Now, if they get rid of real estate taxes, I'll be in hog heaven.
2007-01-24 10:52:15 · answer #4 · answered by regerugged 7 · 0⤊ 0⤋