Many military borrowers of VA loans often wonder if they can pay off their loan early. With conventional loans, you can pay off your loan early but there is a huge pre-payment penalty. The penalty is usually 20 percent of the original principal balance. Traditional VA loans do not work that way, there is no penalty for paying off your loan early or having another military veteran assume your loan. The focus lies in the benefits of paying off your loan early and how you can save thousands of dollars on your fixed rate 30 year loan.
How to Benefit From Paying Off Your Loan Early
If you have a traditional 30 year fixed rate VA loan, you can expect to pay tens of thousands of dollars in interest. You can also expect to pay more if you stay in the home for the full 30 years. One way to shave off thousands of dollars in interest is to pay a little extra on your mortgage payment. If you can pay anywhere from $50 to $100 on your mortgage payment each month it leads to you paying off your loan early and saving thousands of dollars. Just notify the lender on your payment that the extra funds are to reduce the principal balance of the loan or they will put the funds in an escrow account. Keep that in mind when you are paying extra on your mortgage.
Where to Find Help for Your Early Pay Off
If you have questions about paying off your VA loan early, do not hesitate to contact us. We are a professional mortgage service firm based out of New York with a strong reputation for helping people with their mortgages. We guide you by the hand throughout the entire mortgage process.