When you prepay your mortgage you make extra mortgage payments before they are due. Prepaying your mortgage can help you save interest and you can pay off your mortgage sooner. Make sure you find out whether your mortgage has a prepayment penalty before trying to prepay your mortgage.
There are several mortgage questions that home buyers and homeowners should ask their lenders before filling out their applications. Most home buyers and homeowners don't know what they're getting into when they finance or refinance their homes with a mortgage, and handing that application in to your mortgage lender without knowing what you're signing could get you into trouble. One important question home buyers and homeowners should ask their mortgage lender is how their credit will affect the mortgage loan's interest rates and terms.
If you add just $25 to the required payment on a typical $100,000 home loan, you'll save more than $25,000 over the life of the loan. And, you'll reduce the term of your loan by 44 months, or 3 years and 8 months. Although the prepay process isn't particularly difficult some homeowners are stopped by the following "myths."
It's important to look at interest rates when you're thinking about refinancing your home mortgage loan. But there's more to deciding whether to refinance than just interest rates. When you're trying to decide whether to refinance your mortgage you need to think about how long you will stay in the home and whether you can recover closing costs. You should also look at whether there's a prepayment penalty for your old mortgage loan.