ATLANTA - Congratulations, you finally bought your first home. You got a great rate on a thirty year fixed rate mortgage, so your monthly payments are affordable. But a look at your amortization schedule gives you a shock - over thirty years, you’ll pay two hundred thousand bucks in interest as you pay for your house. There MUST be a better way!
Here to explore alternatives is Real Estate Expert John Adams.
Question: John, two hundred thousand bucks in INTEREST seems like a lot of money - what’s the scoop?
Adams: It’s all mathematics. The more you borrow and the longer you take to pay it back, and the more its gonna cost. There’s no magic here.
Q: But why does it seem so expensive?
A: Because you’re paying interest. If you really want to save money, just wait until you have the cash in the bank, and then write a check for the home purchase.
Q: If we had to do that, most of us couldn't afford to buy a house for many years, if ever!
A: I agree! So you are better off getting a loan and buying your house now when you need it!
Q: But are there ways to pay off the loan early?
A: Yes, there are.
Q: So, your lender will accept any of these options if you decide to use them?
A: Yes. You may need to mark the additional payments as PRINCIPAL, but the lender MUST accept them.
Q: John, what’s the bottom line?
A: If you want to pay off your loan early, you are always welcome to do so. It’s up to YOU to decide if that course of action is right for you!