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Message
re: Home Equity question
Posted on 8/2/13 at 12:50 pm to yellowfin
Posted on 8/2/13 at 12:50 pm to yellowfin
quote:
Add'l principal payments change the amortization schedule so more of your monthly payment will go to principal.
Like I said, I could be completely wrong and maybe I am... But will that change the actual dollars that he pays in interest over the next 4-5yrs? Long term, I agree 100% its smart to try to pay off early, but I don't see the point as he won't actually see a benefit since he plans on selling so soon.
2
Posted on 8/2/13 at 12:53 pm to Lsut81
quote:
But will that change the actual dollars that he pays in interest over the next 4-5yrs?
yes, he will pay less interest in next 4-5 years which means more towards principal and his balance will be lower when he sells in 4-5 years. Therefore more money in his pocket at that time.
If he is paying $10 extra each month it won't make much difference in 4-5 years. $200-$400 extra each month could make a pretty significant difference.
ETA: There are a few instances where mortgages have an early payment penalty and you are not allowed to pay any extra during the first _____ years. However those are not very common these days.
This post was edited on 8/2/13 at 12:56 pm
Posted on 8/2/13 at 12:54 pm to Lsut81
quote:
But will that change the actual dollars that he pays in interest over the next 4-5yrs?
yes it will
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