Lenders will usually charge you a prepayment penalty if you pay off your mortgage total owing before your term is up, or if you make more frequent, or larger payments. This prepayment penalty fee usually expires after the first five years of the mortgage term, but you need to look carefully because many lenders have a fee that never expires. People often use a mortgage prepayment calculator to find out what the penalty would be if they paid their loan off early. These prepayment calculators can be found on most bank websites, or mortgage specialty websites.
Prepayment penalties are often quite high. The average cost is about six months worth of refinancing mortgage This can be a pretty big fee depending on your interest rate, and the total principal. Fees can be even higher if you got your mortgage through a bad credit lender. The reason these fees get charged is because interest rates are how lenders make money. If your loan is paid back early, they lose out on potentially thousands of dollars worth of interest. Early repayment methods such as those found refinancing mortgage "Mortgage Cycling Revealed" can show you how to have your entire mortgage paid off in ten years.
Using a mortgage prepayment calculator can tell you how much you should expect to pay to the bank in fees if you pay off your mortgage early. Before you do anything, make sure that you check the terms of it so you can find out if you will even have to pay a fee. This depends on how long you have already had your mortgage and what the terms are of the loan. If there are no extra fees to pay then you will not have to worry about being penalized for paying your mortgage off before the end of the term.
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