Posted on: 18th Sep, 2012 02:41 am
I am a first time homebuyer. I have little knowledge of how mortgages work and have a few queries. Say I take out a $100,000 mortgage over 10 years, but win some money or something, and still have 5 years left on the mortgage...can I pay off the rest of it early, in bulk?
Hi Cemnar,
You can pay off the mortgage early provided there is no pre-payment penalty clause mentioned on the mortgage. If there is such a clause mentioned on the docs, then you will liable for paying a penalty for paying off the mortgage early.
Thanks,
Jerry
You can pay off the mortgage early provided there is no pre-payment penalty clause mentioned on the mortgage. If there is such a clause mentioned on the docs, then you will liable for paying a penalty for paying off the mortgage early.
Thanks,
Jerry
I am completely agree with Jerry that you will have to pay pre-payment penalty in case of early repayment of the loan. To know more about pre-payment penalty, log on to http://www.mortgagefit.com/prepayment-penalty.html
Its up to you if you want to pay it earlier but if you pay it before the due date, I think you can also start refinancing your loan. But it is always important to follow your contract and rules of the mortgage.
Yes, you can pay off the mortgage loan earlier if you can afford to do so. However, you need to check out that there is no pre-payment penalty terms stated on the mortgage. In case, you find such a clause on the docs, then you will be held responsible for paying a penalty to repay the mortgage.