Having debt, no matter which kind, is a huge stressor.
Even “good debt” like a mortgage can become frustrating when you see how much you are paying in interest instead of paying down the principle cost of the home.
In the end, you could end up paying double the price of the home by the time you pay it off completely.
By prepaying your mortgage, you can cut down on the interest you owe, while also paying your home off sooner and building equity faster. I recently read an article on Realtor.com about prepaying for a mortgage, and I wanted to lay the options out for you today.
Here is a link to the full article, but to keep things short and sweet, here’s what you need to know about prepaying your mortgage:
The first thing you need to do is figure out your interest rate and the balance on your mortgage. Then you can decide how much you want to, or are able to, prepay.
Prepaying and refinancing are not the same thing. The point of refinancing is to get a lower interest rate, and it requires you to get an all-new mortgage with new terms.
Prepayment is an investment decision. You need to consider your risk, and also your reward.
Depending on your tax situation, prepaying may not be a wise investment decision. Prepaying reduces mortgage interest, which is tax deductible.
Getting rid of other debt, such as credit card and student loan payments, may be a smarter decision for you than prepaying your mortgage, but each situation is different.
A lot of home buyers in Indianapolis are considering prepaying their mortgages, so I wanted to keep you informed on exactly what is going on.
If you are interested in taking a look at any Indianapolis homes for sale, click here to get full access to the MLS.
If you’re considering selling your home, I invite you to click this link to get an accurate valuation of what your home could sell for in our market.
If you have any questions in the meantime, feel free to give me a call or shoot me an email. I look forward to hearing from you!
Your local Indianapolis Realtor,
Stephanie and Derek Evelo
Keller Williams Realty
8555 N. River Road, Ste. 200,
Indianapolis, IN 46240