Wow, this was interesting!
Find a Conversation
| Thu, 01-27-2005 - 1:12pm |
I called my bank today to inquire about my 2nd mortgage. This is our "target" debt this year. I wanted to know if there was a pre-payment fine. In other words, would I have to pay a big fee to pay off the loan faster than the 20 years that it's actually for.
I was surprised by what she told me. Maybe others have heard of this before, but I hadn't. She said that if I paid off the loan in one large lump sum, I would be penalized $100. BUT...if I paid the principle down a little each month, I would not be penalized at all. Isn't that interesting? So if I had all the money in-hand today, they would make me pay an extra $100....but if I took that money and split it over mulitiple month's payments, even if it's just a few months, there's no extra charge.
Fascinating! LOL! :-D

I guess it would depend on how much you pay in interest every month. Would it be worth it to pay off the outstanding principle and interest and then tack on a $100 fee, or pay the extra few months interest, which could add up to more than $100?
Windy