Once you apply for and receive your mortgage to get a new home, you are signing on to make payments for many years in the future. Mortgages are available for 15 year terms, but most people choose the 30 year mortgage. If you do, then you are signing up for three decades of payments on your Tucson home. That is such a long time that many people wonder if they should prepay their mortgage. Just what does this mean? Is it a good option for you? Here are the answers to those questions.
What is Prepaying a Mortgage?
This simply means making payments in advance. You can generally make as many payments as you’d like as early as you wish and some people do this in order to pay off their mortgage more quickly. Some mortgage companies will charge penalties for early payoffs, so before even considering prepaying a mortgage, you will need to check with your lender in order to determine whether or not there would be a penalty involved.
Why Do This?
What is the advantage to prepaying a mortgage? For one thing, it will get you out of debt much sooner. This is the main draw of prepaying. For another thing, it could save you thousands of dollars in interest. If you choose to prepay your mortgage, make sure to choose the option to make the extra payments go directly to the principle. This will make the amount go down quicker and will save you a great deal in interest.
Should you prepay your mortgage when you have a Tucson home? There are many good reasons to do this, but before you do, you will need to make sure you can afford these extra payments and that they will not have too much of a negative effect on your budget each month.
The Blass Real Estate Team provides only the highest level of customer service. Our real estate office is located in Tucson, Arizona and we represent both home sellers and buyers and specialize in residential property, REO property’s (forclosures), new homes, VA, FHA, green living, condo and townhomes, manufactured homes, mobile homes, and land.
