Why You'll Regret Paying Off Your House Early

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Paying off your house early could trigger a “mortgage prepayment penalty,” costing you thousands, if not tens of thousands, of dollars by surprise. This prepayment penalty is a LOT more common than most homeowners think, and you may be sitting on one without even knowing it. In short, once this penalty is triggered, you’ll owe a fixed amount or a percentage of your loan balance just to pay off your property. So, how do you know if your mortgage has a prepayment penalty? Tune in and find out!

Christian Bachelder and David Greene have seen this type of sneaky penalty clause time and time again. The bad news? Not every loan officer or lender will outright tell you it’s in your mortgage. You’ll be left with a BIG bill the day you decide to pay off your mortgage early, which could put you in a VERY tight spot. Thankfully, there are a few rules of thumb to follow when it comes to mortgage prepayment penalties, BUT, if you’re an investor, you could already be stuck with one.

Do you think a mortgage prepayment penalty is worth the risk? Or would you go for a completely different loan to not pay the penalty? Let us know in the comments below!

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Check Out Another Mortgage Monday Video:
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Prepayment Penalty: What It Is And How to Avoid It:
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DSCR Loans: How To Use Pro Strategies To Save More And Make More:
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0:00 Is Paying Off Your Mortgage a Mistake?
1:16 Common Prepayment Penalties
4:40 When to AVOID Prepayment
7:42 Don’t Get Stuck on a Refinance
8:14 Connect with Christian!

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Комментарии

Awesome content like always! $25M in debt and in NO RUSH to pay it off.. LEVERAGE is the name of the real estate game! LOVE it guys.. 📈📈📈

TheFasterFreedomShow

Call me what you will but so I can not rationalize leveraging my house for a rental house. Paid off the house and when I’ve saved a down payment, I’d buy my first rental then leverage the equity of that to buy the next.

Treehandler

Insightful topic here. I purchased my 12 unit with a DSCR loan and having a good understanding on prepayment penalties was very helpful during the process.

Zachdpate

This is such an interesting concept, and understandably there’s a mental hurdle to jump when putting into practice!

soihearyoureintoproperty

The real mortgage Monday question is when will I be able to use the One Brokerage here in Georgia

michaelsockwell

I was just hit with $17, 000 in prepayment penalty. It hurt

yankeedoodle

I have sold a few of my rentals on contract. My primary goal is to earn interest. I include a prepayment penalty of 15% the first year, 14% the second year and so on. One of my motivations is that if a buyer flips my house while using me for financing, he should give me some of the profit since I was party to the process. A buyer goes into this eyes wide open, all they must do is read what they agree to. I think mortgage companys have similar goals. Next time I will charge more if I can.

johncummins

Taxes usually get passed on to the consumer. When a business buys from another business with the purpose of selling to a consumer, it does not get taxed. Items only get taxed, sometimes, if the product is going be consumed by the business itself.

Tony-ewjt

Hey guys I would like to see an episode on different types of loans. The bridge loans FHA they say all kinds of loan programs that are out there can we get an episode on that subject

djkirby

The president doesn't set the interest rate. Politicians do not set the interest rate. The federal reserve does that.

bahbahblacksheep

I have a question a moneylender told me I could put down as little as five for personal little 15 for rental I need paperwork what is the paperwork I need

brom