Return it in advance. However, many people are also entangled and returned in advance.
Is it worth changing? Let's take a look at whether it is worthwhile to repay the loan in advance.
1. Are you ready to sell the house?
Some people want to repay their mortgage in advance, because they want to sell this house, change it into a better house and improve their living environment. Generally speaking, it will be easier to sell a house with clear property rights and no loans, and the transaction time will be greatly shortened. Therefore, if your family intends to sell the house in hand for a big house this year, or pay off the loan of this house and enjoy preferential policies to buy a new house, it is necessary to repay the mortgage as soon as possible.
2. Is there a penalty for prepayment?
Some banks stipulate that prepayment also requires payment of liquidated damages, so whether prepayment is cost-effective depends on whether prepayment can be stipulated in the repayment contract, and if so, whether there are any additional breach clauses. Some banks will charge more liquidated damages for prepayment, but the regulations of each bank are different.
Third, can it bring better risk avoidance?
Some people want to repay their loans in advance to avoid economic risks and not put too much pressure on themselves. Many people feel that the mortgage is there, and they always feel that they are burdened with a heavy burden. Moreover, the economic situation is uncertain and the future economic expectation is not very ideal, so they want to repay the loan in advance to solve their worries. If the lender's mortgage is not very high, his economic pressure is great, and the future economic level is unpredictable, there is no need to repay in advance.
4. At what stage is the repayment period?
As we all know, there are two main ways to repay the loan when buying a house, one is the equal principal and interest repayment method, and the other is the average capital repayment method. According to the financial calculation, during the loan repayment period, buyers who are in the following two situations will repay the loan cautiously:
If the principal and interest repayment amount is half, it is not cost-effective to repay the loan in advance. Matching principal and interest repayment is a fixed monthly repayment amount, in which the repayment principal increases and the repayment interest decreases, which means that the borrower pays a large proportion of interest in the early stage and a small proportion of principal. If the borrower chooses to prepay in the middle of repayment, it means that most of the interest has been paid off, and the prepayment is more of the principal. In this case, it is not meaningful to choose to repay the loan in advance.
More than one third of the principal has been repaid. Matching principal repayment is to spread the total loan amount evenly to the cost, and calculate repayment interest according to the remaining principal. With the increase of repayment time, the remaining principal decreases and the repayment interest becomes less and less. When the repayment period exceeds one third, the borrower has actually paid half of the interest. If you choose to repay the loan in advance, you will pay more principal, which will not effectively save interest expenses. Therefore, it is not cost-effective to repay the loan in advance at this time.