Question
Simple Intrest Mortagage?
Do you think that a simple intrest mortage would save a bundle if i am paying an exsorbant amount towards the intrest and paying all my payments ahead of schedual. For people who pay a lot ahead of time what is the ratio of monies that is saved vs. a conventional loan. Is there a such thing as a simple intrest 5/1 Arm?
2 years ago - 2 answers
Best Answer
Chosen by Asker
Simple interest can save you money in some cases, however it really does not help you vs. a conventional if your pay histories are the same. Inerest is calculated every day on your balance with simple interest so you can divide up your monthly payment and save money since you are not accruing interest on the whole balance each month. On a conventional mortgage, they will not accept partial payments so you only get one chance to knock down the principal. However if you just pay every 30 days your amortization witll be the same
Source(s)
Used to work in a bank for 4 years
by Daniel N
2 years ago
Asker's Rating: 
Other Answers
BEWARE! You should be aware that you could be upside down in your loan in 5 years, meaning you will owe more than the house is worth. You could potentially be putting yourself in a position to lose everything, including your good credit. If you needed this for a short term 1-2 yrs, it may be ok.
by DJ B- 2 years ago