Prepaying A Mortgage
It is true that prepaying a mortgage can save loan interest costs over time. What is not widely understood is that this savings may come at the expense of paying more income taxes and experiencing lost opportunity costs on the extra payments which may result in costs greater than the loan interest savings. The estimated total cost to the consumer is rarely explained or calculated by many financial institutions while the interest saved is always shown. Consumers should be careful to obtain a complete and proper analysis before spending their hard earned money on paying down their mortgage faster. The LEAP process provides helpful information for you to review with your mortgage broker.
The information provided is not written or intended as specific tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
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