Details on my mortgage -
Interest bearing Principle $197,000
Deferred Principle $95,440
Interest rate 4.7%
20 year loan with 18 years left.
I wanted to pay $7,000 extra a month for the Deferred Principle but the lender company told me I cannot pay on the deferred principle while there is a interest principle and thats need to be paid off first.
So my question is if i put a extra $7000 a month on the interest principle and pay off that early would I still have the remaining years to make payments on the deferred principle?
Why pay it off?
With $7K per month you could probably buy a rent property every 3 or 4 months. It was going to take you over 40 months to pay off that note which means a minimum of 10 rent properties during that same time frame, probably more like 12-15. At that time, those properties could easily pay your mortgage payment.
@Fred W Johnson , sure, you could start paying out the deferred principal once the 20 year amortized principal is paid out early (based on what your Lender told you).
You'd probably be a good candidate for refinancing into a 30 yr fixed (without balloon), wouldn't you? Then I agree with Greg, what's the urgency to pay out a low interest loan, when all the surplus money burning a hole in your pocket each month could be put to better investing use?
Welcome to BP. All the best...
I couldn't agree more with Brent and Greg! Those extra investments(extra payment on balloon) could be used to buy more properties, which can turn into a great return on investment. A balloon mortgage that does not fully amortize over the term of the note, leaving a balance due at maturity, so placing those extra investments (7,000 extra payment) in a better place would be more beneficial for you. Where the market is today, would be great time to take advantage for refinancing!