Payment of principal at the beginning of the mortgage …?

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I was told that payment is on the capital before the first scheduled payment of interest by thousands over the term of the loan will of course save and get it paid off much faster. Something to do with “before” all the time on payments. Can someone explain this more clearly and how it works. In addition, as I see that even on my normal repayment plan (I am a visual learner)? Thank you!
It’s sort of a stupid question, but if you need more of your money every month and pay as you pay off your loan more quickly, they will still charge you the full amount of any interest? I hate the way the majority of my payment goes to pay interest immediately, and then as $ 100 for the customer. Does it depend on the bank? Did you know that death is death in Latin, a mortgage is really measuring a death?

  1. Reply
    February 9, 2011 at 11:18 pm

    If you ever look at a loan amortization table you will see that in the first few years of a mortgage you pay very little toward principal. So actually any time in the early years you make an extra principal pay down payment it effectively puts you ahead time wise toward paying off the loan. Lets say your mortgage is $ 300,000 and you make a $ 10,000 pay down. Look at the amortization table and see timewise when your loan balance will be $ 290,000. You will effectively jump ahead to that point. However that only works for a fixed payment loan. On an adjustable they may just reduce you future payments to compensate for the pay down.

  2. Reply
    Patricia S
    February 9, 2011 at 11:34 pm

    The interest is charged for how long the bank had to lend you the money, so if you pay off your loan off early, you will not have any accrued interest to pay. The exception would be if you have a prepayment penalty on your mortgage (check your mortgage papers), and you pay off the loan before the prepayment penalty expires, usually 3 to 5 years, you may have to pay some interest.

    I would think that a mortgage is a death gauge only if you don’t make your payments and you end up in the street… LOL

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