REIMBURSE YOUR MORTGAGE EARLY: IS IT A GOOD IDEA?

REIMBURSE YOUR MORTGAGE EARLY: IS IT A GOOD IDEA?
REIMBURSE YOUR MORTGAGE EARLY: IS IT A GOOD IDEA? 



After subscribing to a home loan, the borrower has a term to repay the entire loan. In the meantime, it is possible that the borrower has managed to pool funds that will allow him to anticipate repayment of his loan.
So, in such a case is the repayment of an early mortgage is interesting?

BENEFITS THAT DEPEND ON PENALTIES

To know if the fact of anticipating the repayment of one's mortgage is interesting it is necessary to have in front of the information concerning the penalties that engenders this step.
The lender can ask its client to pay compensation when it decides to pay in advance all of its monthly payments. The penalty rate may vary from case to case.

The value of the penalty can be calculated according to a precise formula: (value of the loan x fixed interest rate) x number of months of interest.

However, the bank can also calculate the indemnity by asking to borrow it to pay 3% of the capital due on the date of realisation of the refund.

To the borrower then to make his calculation, and see what is interesting: anticipate the credit or pay the monthly payments.

EXPERTS ADVISE AVOIDING PREPAYMENT

Even if the rate of interest remaining related to the repayment of your mortgage is quite low, it is often more interesting not to anticipate the payment of the entire loan.

Alternatively, if you have a large amount of money in your savings account, it would be better to invest this amount. You could thus make this money grow by realising another project.

PARTIAL PREPAYMENT: A SOLUTION APART

If you have had a return of money and want to repay your mortgage in advance, you can also opt for a partial prepayment .

With this approach, you can lower the value of the monthly payments you have to pay, without changing the duration of your loan.


On the other hand, if you want to lower the total value of your loan, you can bet on reducing the duration of your loan.


thanks for the time .

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