Extra payments on mortgage question (loan, interest rate, pre-approved, rate)

[gvanderende]

Thanks in advance for any helpful feedback to my question. I was recently pre-approved for a mortgage. The loan amount is not too large. With a 30 year mortgage, the monthly payments would be low. I like this because my job future is somewhat tenuous, and low monthly payments should protect me from foreclosure. I would like to pay off the loan quickly. Do lenders generally allow a borrower to make large extra monthly payments on a mortgage, or do they compel the borrower to change the specifics of the loan? I imagine the lender loses a lot of money through lost interest payments if I pay off the loan quickly.

[wireyourworld]

Its written in the loan documents. Ask before you sign.

[Jkgourmet]

If you are getting a low that does not allow pre-payment of the principle, you need to find a new mortgage broker. Then you can make those pre-payments, but be sure to write a separate check, and mark the check "apply to principle."

Another thing to keep in mind: Don't pay the mortgage balance down until you have stashed an emergency fund for at least 6-8 months of living expenses. And personally, with interest rates as cheap as they are, I'd be putting money into an IRA or 40k or Roth LONG before I'd pay off the mortgage quickly.

[Pfhtex]

Prepayment penalties, for the most part, do not exist any more. Your GFE has a box that will confirm yes or no for you.

As far as extra payments, yes you can accelerate payoff. Try this website: Mortgagesaver

[djacks]

Originally Posted by gvanderende

Thanks in advance for any helpful feedback to my question. I was recently pre-approved for a mortgage. The loan amount is not too large. With a 30 year mortgage, the monthly payments would be low. I like this because my job future is somewhat tenuous, and low monthly payments should protect me from foreclosure. I would like to pay off the loan quickly. Do lenders generally allow a borrower to make large extra monthly payments on a mortgage, or do they compel the borrower to change the specifics of the loan? I imagine the lender loses a lot of money through lost interest payments if I pay off the loan quickly.

I was previously through Chase and now through Flagstar. Niether of those banks had a prepayment penalty. I've always paid extra principle since I bought my home in 2008. Now since I refinanced late last year with a much lower rate I've been making double payments. Although my new refinanced loan is supposed to be into paid in full in 2042, I'll have it paid off in less than 10 years at the rate I'm paying now.

[djacks]

Originally Posted by Pfhtex

As far as extra payments, yes you can accelerate payoff. Try this website: Mortgagesaver

That's a biweekly amortization calculator. Might want to try this one.

[Pfhtex]

It also incorporates extra $$ payments.