Quote:
Originally posted by Porsche-O-Phile
Until the bank slaps you with a penalty for overpayment. They want the interest; they could care two *****s about whether or not you want to own the property free and clear faster. They have no interest in helping you - only helping themselves (through making you pay as much in interest as possible).
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Believe me, to trigger a Pre Payment Penalty (AKA PPP) you have to pay down the principal a total of 20% within a 12 month period.
So, if you owe $400K on the home, on top of the interest payments you would have to pay down the principal a total of $80K within 12 months - about $7800 / mo ON TOP of the actual interest generated.
The better loans do not have any sort of PPP so you can pay off as soon as you wish..
it's not as easy as it sounds....