First, the monthly repayment amount remains unchanged, but the repayment period is shortened. Choosing this method, the repayment pressure of each month has not changed, but after paying off part of the principal, the total number of installments has decreased.
The second is to keep the number of repayment periods unchanged, but reduce the monthly repayment amount. This method is very simple, that is, after paying off part of the loan in advance, the monthly repayment pressure can be alleviated.
The above two methods can be selected by the lender. If you don't know which way is better, you can ask the bank to calculate how much interest the two repayment methods will pay and see which one will pay more interest.
If the lender needs to prepay, he can contact the loan bank first to see what materials need to be prepared and ask whether the prepayment bank charges a handling fee. If so, he should also find out what the handling fee rate is.
How to pay off the mortgage in advance?
First of all, from the choice of repayment period, when banks handle housing loans, the shorter the repayment period chosen by buyers, the more mortgage repayment amount they need to pay to banks every month. Of course, under the huge repayment pressure, the mortgage interest to be paid is relatively small, so short-term mortgage handling has almost become the choice of most people who are ready to repay in advance. But is prepayment really as simple as buyers think? In fact, Bian Xiao thinks that prepayment should be analyzed according to the specific situation of mortgage handling to see if prepayment is worthwhile.
The loan situation of some property buyers, even if the loan is paid off in advance, is not only meaningless, but also may not be worth it. For example, the repayment progress of housing loans has been returned by the borrower by about half. In this case, even if the loan is paid off in advance, it does not make much sense. You know, when the loan is still about half, the borrower has basically paid off the loan interest, and the only department that has not paid back may be the loan principal. Therefore, it is not cost-effective to save interest expenses by prepayment, because the loan interest at this time is not too much, and the difference between the unpaid part and the prepayment amount will not be too much.
Therefore, if the borrower is ready to prepay, it is best to apply at the initial stage of loan processing. After all, the early repayment is the most cost-effective time to repay in advance. Under normal circumstances, the amount of the first repayment is basically to repay the interest of the housing loan, and the borrower does not begin to repay the principal until the interest is almost paid off. Therefore, the initial repayment period is the best time to pay off the loan in advance, and only in this way can the interest be saved to the greatest extent.
I believe you should have heard that there is a fixed number of years to go to the bank for loans, so there is also a stipulation that the repayment period should not exceed 30 years in mortgage handling. Therefore, when the borrower handles the loan, after you choose the repayment period, the bank will calculate the loan interest you choose according to the regulations, and then add it to the amortized principal, forming the total amount of mortgage that the borrower needs to repay every month.
Therefore, in the early stage of repayment, if you choose to repay in advance, it means that your repayment cycle will be shortened, and the interest will naturally be reduced accordingly. Moreover, after reducing the interest and shortening the repayment period accordingly, the loan amount repaid by the borrower in advance is definitely much less than the repayment amount on schedule.