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re: Home Equity question
Posted on 8/2/13 at 12:04 pm to Latebloomer
Posted on 8/2/13 at 12:04 pm to Latebloomer
quote:
Yes, it would reduce the principal and the interest will be less.
Not doubting you, but how so?
When you sign up for a 30yr mortgage, your payments are determined as X. Principal and then interest on the amount financed.
Your payments do not change as your principal is paid down
3
Posted on 8/2/13 at 12:07 pm to Lsut81
quote:
Not doubting you, but how so?
When you sign up for a 30yr mortgage, your payments are determined as X. Principal and then interest on the amount financed.
Your payments do not change as your principal is paid down
Your payments do not change throughout the course of the loan. But the amount going towards principal and interest do change. The lower your loan balance the more that goes towards principal and the less that goes towards interest.
Posted on 8/2/13 at 12:11 pm to Lsut81
The interest is figured each month on the remaining balance. Balance is lower, interest is lower. If he didn't sell it, he would just pay if off sooner.
Posted on 8/2/13 at 12:59 pm to Lsut81
quote:
Your payments do not change as your principal is paid down
Right, the payments don't change but (from my understanding) the amount toward principal increases the closer you get to paying off your loan. Thus with each payment more is going toward principal and less to interest.
ETA: Sorry posted this before I read through the rest of the thread. Glad I was right in this instance.
This post was edited on 8/2/13 at 1:04 pm
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