Question: I have a home loan for 200k for a 20 year term.?

(Posted by: smithdisco on 2010-03-10 13:26:11)

If I pay the whole 200K after 10 years, will I have to pay the interest for the remaining 10 years?

Posted by: Santa Clara County Realtor on 2010-03-10, 13:50:37

No. If you pay principle and interest for 20 years and in that time pay down the principle to zero. You will be done. This will cot more then 200k though. In that time you'll pay approx 260K vs 330K (assuming a 5.5% interest rate). So paying it off early will save you approx 70,000 in interest. (This will mean paying 800 more each month). Check it out yourself on the early payoff calculator below. mortgageloan.com/ calculator/ mortgage-payoff-calculator

Posted by: MoneyMonkey on 2010-03-10, 13:28:10

No you won't. Good for you! More people should pay off their mortgages early when they can. I paid mine off really early and now the house is mine, mine, mine! Don't forget you will still have to pay your Property Taxes to proper authority, and your Homeowner's Insurance directly to the insurance company.

Posted by: TheEasterDuck on 2010-03-10, 13:28:28

Yes, And dont take a loan you think you might be able to pay off because if you dont your screwed and ur just helping our recession

Posted by: Rationality on 2010-03-10, 13:28:37

No. Once the principal is paid off, you're free (unless you have a loan w/ prepayment penalties, which would be odd),

Posted by: Dan B on 2010-03-10, 13:29:42

No. But check your loan documents. Some have a prepayment penalty for cutting them off of their interest. It will probably amount to about 1% of the interest you would have paid had you held on for the full 20 years. FHA does not allow prepayment penalties on their insured loans. Commercial loans probably have the penalty.

Posted by: RichardL on 2010-03-10, 13:45:17

Most likely not, but check your original paperwork. Prepayment penalties are extremely rare nowadays.

Posted by: golferwhoworks on 2010-03-10, 14:03:39

No and there are no more prepayment penalties on any US loans. I am a mortgage banker in TN

Posted by: scarlett on 2010-03-10, 14:28:22

No. Make sure that any payment that is above your monthly payment is sent as a separate check and you write "Principal only " on the check to ensure that they are not applying your extra to the interest too. Follow up to make sure the loan company has processed your extra payments correctly and you will have paid that loan off very early! Congrats!

Posted by: lee on 2010-03-12, 02:12:47

You will only pay interest on your outstanding loan balance. So if you repay your loan in a shorter period, good for you. The bank cannot charge you interest on a loan that has been repaid.