Question:

How to pay off a mortgage loan early?

Answer:

Are you really willing to pay off a mortgage loan early, or you are looking to cut monthly mortgage payments? Borrowers sometimes confuse the two concepts.

Paying off the home loan early can be accomplished in several ways:

  • Monthly prepayments to the principal;
  • Biweekly repayment plans;
  • One-time annual repayment.

Early mortgage payoff is different from monthly payment reduction.

Each of the abovementioned payment strategies effectively reduces the amortization term of the mortgage and the interest cost (IC) of the loan, but doesn't cut the monthly mortgage payment. If you are looking to reduce the monthly payment, you are mainly advised to refinance an existing loan to longer term and/or lower interest rate, or buy discount points at closing.

Recommended helpful present and future homeowners links:
Why: Refinance to a fixed rate loan while mortgage rates are still low.
Link:
Why: Because FHA loans are insured by the US Federal Government they have very competitive interest rates and are easier to qualify.
Link:
Why: Know and protect your credit report and score.
Link: See All 3 National Credit Scores & 3 Reports Instantly, Online & Free
Link this QnA Print del.icio.us Digg
Was this Mortgage QnA helpful?
Not at all
  • Currently 3/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
 Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA:

Common misspellings: mortage and morgage