Re: Mortgage prepayment question

Mike <mike@[EMAIL PROTECTED]
> writes:

> Hello, I have a question regarding early payoff of mortgages, and the
> payments.

[current interest payment $610 and principal payment $102]

> Am I reading this right, that I can knock six months off my mortgage
> right now for $624?

Yes.  That's 6 months worth of principal.  You could knock
off the entirety of your remaining mortgage payments by 
paying off *all* the remaining principal.  Same idea.

Note that over time, the principal ****tion gets larger.
6 months worth of principal right now might be $624,
but the next 6 months worth of principal will be somewhat
higher.  Your last 6 months of $712 payments will be
almost entirely principal.  If you had only 6 months
left on that mortgage and wanted to speed it up by 6
months, you'd have to come up with the entire remaining
balance - which at that point will be approx $4200,
not $624.

Look at the far end of your amortization schedule.


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