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Benefits of Early Payoff

November 11, 2001

Robert Bruss has advised many times that paying off a mortgage in advance of the payment schedule saves them the interest at the rate stated on the mortgage itself. It is incomplete advice.

The big advantage in paying in advance is the subsequent benefits.

Every time you pay an amount over the regular payment, you reduce the principal on which the next interest amount is computed. The next payment is reduced by that amount and more is applied to reduce the principal. This is repeated on the next and all subsequent payments. The increase is exponential.

ART CHESLUK

Santa Monica

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