Many mortgage borrowers today are trying to put in as much money as possible than is generally supposed to be. What is the best way to pay off your mortgage early? It is worth noting that reducing payments or terms in different situations has its advantages.
As part of the payment of such a debt, when a person has extra money, they can be spent on early repayment. But not everything is so simple. A lot of questions immediately arise about how best to get rid of a loan, reducing the period or amount. When is it better to do it: at the end or at the beginning? Accumulate funds and pay them in full or deposit in small amounts? It should be noted that the method directly depends on the specific client and his financial situation, as well as income. How confidently a person stands on his feet - this is the main question.
Options for changing the schedule
Russianfinancial institutions with a mortgage in almost one hundred percent of cases work on an annuity payment system. What does it mean? Is it profitable to pay off the mortgage ahead of schedule in this case? The bottom line is that at first they pay mainly interest on the loan, and then - bank debt. After the early repayment procedure, credit parameters change, as the amount of debt to the company is re-formed. Therefore, bank employees have to redo the schedule. Suggested:
- Reduction of the loan term within the framework of the same monthly payment.
- Decrease in transfers, but keep the same number of months of payments.
How is it more profitable to pay off the mortgage ahead of schedule? Is it better to choose a reduction in the term or amount? Against the background of the first option, the monthly load does not decrease in any way, and the percentage becomes lower due to the short term. The second provides for a reduction in the monthly payment, the family is relieved of the possibly overwhelming burden during the crisis period.
Methods and useful tips: reducing the term
Early payment of fifty to one hundred thousand rubles allows you to reduce the term by several months at once. In the event that you open the calculator and calculate the available options, then within the framework of a single early repayment, it will still be more profitable to reduce the period. Given that the amount of payment in this case will remain the same, the amount of overpayment of the banking organization on the loan will be less.
In order to understand how it is more profitable to pay off the mortgage ahead of schedule, it is worth considering the situation when a loan was taken to purchase real estate undertwelve percent in the amount of one million rubles. Payments begin in March. For example, in September, the borrower is given a premium of sixty thousand, and he decides to pay off some of the mortgage with it. In the event that he chooses to shorten the term after the deadline, he receives a benefit of almost forty thousand rubles.
Methods and useful tips: reducing the amount
Now let's consider whether it is profitable to pay off the mortgage ahead of schedule in small amounts. The same story with a loan of one million rubles will be with a decrease in the amount. The overpayment will be more in comparison with the reduction of the term: thirty-one thousand against twenty-nine. Thus, the benefit from early single repayment with a reduction in payment will amount to just over seventeen thousand rubles. It turns out that minimizing monthly amounts is not very profitable, but this is not entirely true.
If there are no restrictions on the number of early repayments in the contract, then how is it more profitable to repay the mortgage ahead of schedule? In this case, you should continue to deposit the savings each month. This option will be almost economically equivalent to the previous one.
The payment system with a reduction in the payment amount helps, for example, in a difficult financial situation, with a decrease in the borrower's profit. Reducing the amount of funds contributed, of course, will help to survive the crisis without allowing delays. Family finance experts advise that when there is a choice of how long it is more profitable to take out a mortgage as part of early repayment, one should adhere to the following strategy:
- Take onmaximum allowable time.
- Pay early as soon as possible.
After all, it's better to end up with an apartment in the property, even if you overpay ten thousand more, than to risk your only place to live after a personal, albeit temporary, financial crisis.
Advice on early repayment
Choosing the best way to pay such a loan ahead of schedule should be based on the situation: personal and family. You should also pay attention to inflation in the country (whether the money will depreciate). Against the background of its high level, it becomes clear why it is not profitable to pay off the mortgage ahead of schedule, in this case it is better to purchase goods, equipping the apartment.
If there are no restrictions on early maximum payments, then absolutely any option will do: from an economic point of view, it makes almost no difference. True, it is better to agree to a reduction in the size of the payment, and then every month to invest the saved funds ahead of schedule.
When there is a restriction on early repayment, it will be more profitable to reduce the terms. This is more cost effective. If the family is likely to reduce income in the coming years, then it is better to reduce the payment. At first, let's say, the extra money should be deposited ahead of schedule, reducing the transfer, and in a difficult period, pay a small amount.
It would be useful to take into account your character. If the client is an optimist in life and is not afraid of losing his job, then after early repaymentneed to shorten the time. And when the glass is always half empty, then you need to reduce the payout.
Thus, it is impossible to say unequivocally how it is more profitable to take a mortgage if you repay it ahead of schedule, and also what will be more profitable if it is repaid early: a reduction in the term or transfers. It is necessary to approach each situation individually and evaluate personal priorities with financial situation.
When is the best time to repay a loan early?
In the event that the loan was chosen for a long period, it is desirable to make the first repayment in the first year. Next, consider whether it is profitable to pay off the mortgage ahead of schedule. For example, if in the example described earlier the client makes an early payment not in September, but in June (three months earlier), then if the term is shortened, the overpayment will be two hundred and ninety-two thousand (versus two hundred and ninety-four). As a result, the savings will be about two thousand rubles.
When every thousand overpayments to a client are precious, it is advisable to repay the debt as quickly as the situation and the agreement with the financial institution allow. For example, Sberbank prescribes that early payment is possible only three months after the first transfer. After all, it is unprofitable for organizations to quickly pay off a loan. It must be remembered that the earlier the due date for early payment comes, the sooner the balance of the debt will decrease. And the lower it is, the less interest in the end.
In the case when the early repayment of the debt is not carried out all at once, but only in small amounts, then as part of the conclusionan additional agreement in a financial institution, payers face a choice. How is it more profitable to pay off the mortgage ahead of schedule: with a decrease in the minimum amount paid or with a reduction in the payment period.
It should be noted right away that in both situations the amount of overpayment with other loan parameters will be the same, in this regard, you should choose the option that is more convenient. The recalculation is performed according to special formulas, but it is easier to use programs that help you instantly calculate the future amount, in fact, for this you need to enter only the initial data. Now we will learn about how it is more profitable to pay off the mortgage ahead of schedule in the country's leading bank. And is it worth it.
Is it profitable to close a mortgage loan at Sberbank ahead of schedule?
Credit repayment schemes have their own characteristics, which are always described in the relevant clauses of the contract. Below we describe the case when it is more profitable to partially extinguish the mortgage ahead of schedule. Thus, within the framework of a differentiated schedule, after early partial repayment, as early as next month, customers feel a decrease in the debt burden and a decrease in payments due to a reduction in interest charges. With an annuity, the payment is also recalculated down, but its decrease is not so noticeable.
Both situations lead to approximately the same elimination of the burden and minimization of interest payments. The only big difference is that, according to the annuity, they are recalculated according tospecial formula. It distributes the load in such a way that for the remaining period the client continues to pay for the loan in the same transfers, but in a reduced amount. You can ask for a new schedule to be printed at any time at the nearest bank office.
Thus, we answered the question of whether it is profitable to pay off the mortgage early in Sberbank. With differentiated schemes at this institution, early repayment with a reduced period is a good opportunity to bring unlimited ownership of your home closer without pen alty or hassle.
Is it possible to close a housing loan in Sberbank ahead of schedule in full? How?
A step-by-step instruction that helps in deciding how it is more profitable to pay off a mortgage ahead of schedule in Sberbank, as well as helping to free yourself and your property from mortgage troubles in this bank, is quite simple. This requires:
- Accumulate the required amount of money. This is the most difficult step in the permanent loan burden.
- Thirty days before payment, you must go to a branch of a financial institution or go to Sberbank-online to set the day and amount of the last payment.
- Then they submit an application for the full repayment of the loan taken with the date, account number from which the funds will be debited, and the payment amount. This paper will be printed out to the client and the employees of the Sberbank branch will help to fill it out. It is better to contact the office once again, so that later there will be no problems with the amount of early repayment.
- The loan is repaid in full within the selected period.
- Getting the long-awaited help fromSberbank with confirmation of full payment of the contract.
- Remove the encumbrance in Rosreestr from the apartment.
In practice, the human factor often leads to very unexpected events. A letter of full debt payment does not guarantee the fulfillment of these facts. Therefore, after a month, you need to call the employees and ask them to look into the program again so that they confirm the full repayment.
Borrowers have the right under any type of mortgage agreement to contribute an additional amount of funds not taken into account in the planned calculation of payments for the use of the loan (including interest).
This bank allows partial and full early repayment. To do this, you need to write a notification that indicates information about the date of the next transfer of funds on which interest will not be accrued.
It is better to submit an application within 24 hours. According to the conditions imposed by the banking organization, customers are required to send a notification before six in the evening the day before payment. It is necessary to ensure that the specified date is correct, since if there is an error or if the deadline is not met (the main thing is to submit the paper in one day), the operation will not be carried out and, accordingly, the interest on the debt for early repayment will not be taken into account.
After the payer makes a partial early payment, the remaining amount of the debt will be recalculated for the next period. When it comes to full repayment, you must contact the organization in advance (again, a day before),draw up an application and indicate all the necessary information as correctly and carefully as possible, then submit the application and make the payment on time.
It is recommended that before transferring money against contractual obligations, check with the employees of the financial institution whether the application has been accepted and whether it is currently possible to carry out early mortgage repayment at VTB24 bank.
Why is it profitable for customers to pay off a loan for real estate in VTB?
The fact is that after the full payment of the entire required amount, the burden on the property is removed. The earlier the money is deposited under the agreement (the body of the loan is paid), the lower the interest. But there are some disadvantages, for example, the fact that inflation has a positive effect on the amount of the return of funds. Early repayment is carried out in this organization in the following ways:
- Applying to the bank and writing an application for early repayment.
- In automatic mode with the help of an operator from the call center.
Another important feature of the early repayment of a mortgage in VTB is the ability to choose where to send the debited money. You can use them to reduce the terms of the loan or reduce the monthly payment. In order to understand how it is more profitable to pay off a mortgage ahead of schedule at VTB, customers should use a special calculator. To make calculations for both options at once and make the most profitable decision.
These are the main subtleties and features of the refund forreal estate in advance. I must say that the most problematic, and at the same time incomprehensible option for ordinary people, is early partial repayment. An absolute refund is easier to understand and makes it possible to immediately remove the property from the encumbrance by making full settlements with the bank.