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Refinance Purchase Home Equity

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Fixed ARM Interest Only FHA

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Can I Pay Off A Home Equity Loan Early?

By Jim Micheals

Have questions on whether you can pay off a home equity loan early. The answer, yes. Usually, paying off a home equity loan involves refinancing.

However, every bank has different loan terms and conditions which should be read whether you currently have a home equity loan or are considering obtaining a home equity loan.

The following information may help you in your decision to consider the best way to pay off a home equity loan.

Fees:

A bank may charge you a prepayment fee if the loan is paid in full within three years from the date the loan was opened. Some fees will not exceed 1% of the original loan amount or other banks may charge a $500.00 prepayment fee. Also, some banks will waive the prepayment fee if you refinance the loan with them.

Loan Applications:

Some banks will not charge a prepayment penalty if you send in your application on or after September 19, 2009.

Avoiding Fees:

To avoid costs and fees of paying off a home equity loan early is to pay down the principal balance on your own. If you can discipline yourself to accumulating extra money every month, you can add this to your principal balance and pay off your loan faster. This will also lower the interest you would have to pay over the life of the loan.

It is important to read or review the banks terms and conditions regarding prepayment fees on home equity loans. All banks requirements are different and it also depends upon the State that you live in. You need to do your homework and ask questions if anything is unclear regarding fees for prepayment of a home equity loan. Shopping around to see which bank will give you the best deal is a smart thing to do.

Related posts:

1. How Can I Payoff My Mortgage Loan Early?
2. How Can I Calculate How Much I Can Take Out On A Home Equity Loan?
3. Should I Get A Home Equity Loan Or Line Of Credit?
4. What Is A Home Equity Loan?
5. What Is A Closed End Home Equity Loan?