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Colonel Klink Colonel Klink is offline

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  1. Colonel Klink
    10-03-2008 21:36
    Colonel Klink
    If I finance a home for 15 years but later decide to pay it off in 10, will I generally be penalized by the bank?

    Your mortgage contract will say if you are penalized for prepayment. So the answer is to find a lender willing to write your mortgage contract that allows you to do what you want.

    I wish I knew what I know now when I graduated college. Here is my take on what you proposed. 20% down and 15 year payout is excellent. Prepaying in ten years is a noble idea but I'm going to suggest something I consider much better. This is based on compound growth. I'm going to show you how to have $1,000,000 at retirement age 65. If you wait until you are 60 you will need to invest $12,123.22 using a 12% tax deferred compound growth. Because of the 12% tax deferred compound growth if you were to start your road to $1,000,000 at age 24 you would need to invest $84.16 per month.

    While I think paying off a mortgage in ten years is an excellent idea I think funding your $1,000,000 retirement account should come first. You seem to have the ability to fund your retirement to get to the $1,000,000.

    I hope this helps. If you have more questions please let me know. Also let me know when you receive this since this is the first one of these I've received.

  2. adamp05
    09-29-2008 20:58

    You seem to be well read on the topic of real estate. Let me pose a question for you. I will be graduating college with minimal debt in 1.5 years. Upon graduation, I plan to save approximately 20% of the median home price in my area ($120k) as a down payment. Here is my question:

    If I finance a home for 15 years but later decide to pay it off in 10, will I generally be penalized by the bank?

    My logic is that, by financing a home for 15 years but paying it off in 10, I have the luxury of being required to pay lower payments (comparing it to the 10 year payment schedule), but the opportunity to pay it off sooner if I so choose. What do you think?

About Me

  • About Colonel Klink
    Target shoot once a week
    Oakland CA/Reno NV
    Self Defense, HDTV/souround sound, cars
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    Never ascribe malice when stupidity is sufficient explanation


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  • Last Activity: 12-13-2013 19:56
  • Join Date: 11-14-2002
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