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| Paying too much in
monthly mortgage interest |
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If you currently have a mortgage or a
just about to sign on one, you know how expensive they
are, yet how important they are. For most people, a mortgage
is the only means of owning
a home.
Mortgage analyst, Craig Romero, recently released an article
on mortage-listings.com, titled, “97% of American
Homeowners Overpay Their Lender in Mortgage
Interest Every Month.” In this article, Romero
releases the shocking information that mortgage borrowers
will cringe to hear; they are grossly overpaying on monthly
interest rates.
According to a National poll, 97 percent of Americans
overpay in monthly interest. But what the poll was trying
to find out is how many people were not overpaying; three
percent.
“The National poll was conducted last month to determine
how many homeowners take advantage of the prepayment loophole
in our mortgage
system, which eliminates costly interest overpayments.”
Sean Drover, a businessman from Chicago, recently discovered
that he was overpaying $217 monthly in mortgage interest.
“Honestly, I was sick to my stomach when I thought
back on all the monthly payments I’d made. If I
would have known about the pre-payment loophole when I
first bought my home I could have put
all that money into equity instead of my lenders pocket,”
Drover said.
The reason the majority of Americans are overpaying on
their mortgage interest is because of a term called “front
loading.”
Front loading is, “when the majority of a homeowner’s
payment is applied towards the interest on the loan instead
of the original amount borrowed.”
As a result, front loading is the primary reason that
borrowers will pay at least threes times over the original
amount borrowed on the loan. This extra money goes directly
to your lender.
“Most people (97%) never stop and take a good look
at how damaging the system really is. Unfortunately, it’s
just the way conventional
mortgages are structured here in America.”
According to Romero, the average American homeowner is
overpaying in mortgage interest by $2,000 every year,
or approximately $60,000 over the entire term of the loan.
“That’s an enormous amount of money,”
said Romero. “This is money that homeowners are
needlessly giving away each year. Imagine what a person
could do with an extra $60,000.”
This prepayment loophole that is available will not only
save you thousands of dollars on mortgage interest, it
can also cut the traditional mortgage term by 10 years.
“Americans must understand this prepayment loophole
isn’t something lenders are eager to share with
their customers. If they did, they would risk taking a
huge cut in profits.”
Prospective mortgage borrowers should research information
about this prepayment loophole. Your lender will probably
say it is a farce, or something along those lines.
But wouldn’t you rather try something that may be
a farce, rather than pay an extra $60,000 out of your
pocket. |
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