Affect Of Huge Principal Payment On Mortgage
by Cindy S.
(New Hope, PA)
I have a 4.75 interest on a $225,000 loan for my home.
My payments are about $1660.00 per month. What if I put $100,000 towards the mortgage, what will my payments become?
First of all I wanted to thank you for visiting my website and leaving your question.
If you have a large amount of cash you want to pay down on your mortgage, while that is a good thing to do, sadly it will not lower your payment.
Your payment is figured on the amount of funds you borrowed when you first took it out.
So if you make a large payment towards the balance, it only benefits the lender. They will gladly accept the money. The chances of you getting them to modify the loan payment are not good at all.
Your best bet is to actually refinance the whole mortgage. Use the money to have to pay down the balance at the closing table.
That way you can have an entirely new payment figured for you. I'm not sure if you have a 30yr mortgage, but this would be a good time to reduce your term, perhaps look at a 15yr. Ask for a "rate and term refi".
Interest rates are very low right now and this could be a good deal for you.
First talk with your current lender and get a quote for doing so. Just tell them you make take your business elsewhere if they do not offer you a "no cost closing" loan. Explain the situation to them and try that first.
If that does not work, feel free to use the sources of lenders on this page and get the banks coming to you for the business.
You're in a perfect spot, you are the customer, make them work for your business.
PS Please share my website on your FaceBook, G+ or Twitter for me. Help me spread the word. Thanks.
Click here to post comments
Return to Mortgage Questions.