Community Chat

[Georgiagrama]

Many years ago I sold real estate.  I learned that mortgages differ and your friend may have a different type. There are many creative ways to purchase a home.  HOWEVER, some mortgage companies have a pre payment penalty written in them.  

When we paid our house down to $25,000, our bank sold our mortgage to what was basically a finance company in Texas.  They had a prepayment penalty and not realizing this, we continued to pay extra each month on our mortgage.  We ended up paying our home off early, BUT, we still ended up having to pay the interest that they would have made if we had continued with a monthly payment until the date our home was supposed to be paid off.  

It was awful but we had to do it.  I will never recommend our original bank, or the company we ended up with for a mortgage.

[glb613]

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@Georgiagrama wrote:

Many years ago I sold real estate.  I learned that mortgages differ and your friend may have a different type. There are many creative ways to purchase a home.  HOWEVER, some mortgage companies have a pre payment penalty written in them.  

When we paid our house down to $25,000, our bank sold our mortgage to what was basically a finance company in Texas.  They had a prepayment penalty and not realizing this, we continued to pay extra each month on our mortgage.  We ended up paying our home off early, BUT, we still ended up having to pay the interest that they would have made if we had continued with a monthly payment until the date our home was supposed to be paid off.  

It was awful but we had to do it.  I will never recommend our original bank, or the company we ended up with for a mortgage.

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When I paid my morgage off early, I got a refund for the interest I did't need to pay. I guess it really does matter what's in your contract.  

[RedTop]

At my bank yes.   Back in the 80's when we had a mortgage, I paid an extra amount monthly, as well as extra payments.  I always had to specify to the teller at the bank what I was paying so it was credited towards the loan principal or an interest payment.   

[Zhills]

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@Kachina624 wrote:

I have an idea... Call your mortgage company and ask! 

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Zhills

Respected Contributor

Posts: 2,813

Registered: ‎11-15-2011

Can you pay YOUR mortgage a year in advance and not make a payment for that year? 

Options

‎07-17-2017 05:52 PM

I have a friend who said he had paid his mortgage 12 payments ahead so he could stay there a year before he needs to make another payment?

Most computerized programs expect a money input between billing dates?  How does yours work?

Yep, call the mortgage company.....DUH!

I do not have a mortgage or mortgage company!  My friend does!

How can you answer a question and not read the question??

[Zhills]

I have a friend who said he had paid his mortgage 12 payments ahead so he could stay there a year before he needs to make another payment?

Most computerized programs expect a money input between billing dates?  How does yours work?

Yep, call the mortgage company.....DUH!

I do not have a mortgage or mortgage company!  My friend does!

How can you answer a question and not read the question??

[Cakers3]

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@september wrote:

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@Kachina624 wrote:

I have an idea... Call your mortgage company and ask! 

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Exactly. I'm sure it depends on the terms of your loan and who you have the mortgage with.  I sometimes pay more than my monthly payment, and they apply the overpayment toward my principal.  But that's how it works with my bank. 

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@september@Kachina624  The OP said her FRIEND was doing this, not her.  She didn't ask if SHE could; she asked if anyone else did.   LOL

[Burnsite]

This depends on the type of loan, but on my mortgage, it would not be possible.  It will pay the balance down, though, settling the debt far sooner.

I think perhaps this can be done with rent.  Not usually with loans.

[CelticCrafter]

I don't know how it works anymore but when we had our mortgage, in the beginning, most of our monthly payment was interest and very little principal. Once we reached the point where there was no interest to take as a tax deduction, we decided to pay it off.  

[Georgiagrama]

@glb613

It was terribly upsetting.  We even hired a mortgage attorney but the way the mortgage was worded, we had no choice.  

I wish I could advise everyone buying a home to be very careful what you sign and if you can, get the prepayment option.   When my youngest daughter bought her house two years ago, the bank told her that wasn't an option but I think it depends on how much money you have and are asking for.    

[september]

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@Cakers3 wrote:

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@september wrote:

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@Kachina624 wrote:

I have an idea... Call your mortgage company and ask! 

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Exactly. I'm sure it depends on the terms of your loan and who you have the mortgage with.  I sometimes pay more than my monthly payment, and they apply the overpayment toward my principal.  But that's how it works with my bank. 

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@september@Kachina624  The OP said her FRIEND was doing this, not her.  She didn't ask if SHE could; she asked if anyone else did.   LOL

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I know that.  I would say kachina and I were talking about "you" in the general sense.