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Do we pay off some of our mortgage with a large lump sum?

My boyfriend and I own a modular home, and we owe about $105,000 on it...My boyfriend is going to be inheriting $100,000 from his grandfather in a few weeks.....We are young and dont really know our options, but basically he is thinking he wants to put $70,000 into our mortgage, and the rest use on a trip, put some $ down for a new vehicle, buy a few things we need and the rest put away for a rainy day.... First off, is that even possible to put that much into your mortgage at once, and how would you go about that? Secondly, is that a smart way to spend the money, by paying off our house sooner?

Asked By: Holly - 9/27/2007
Best Answer - Chosen by Asker
I would look at it as sort of forced savings. Since it would be a little harder to get the money back out than just a money market account or something. It would also give you a lot of freedom because if something happens to your health or job you would not have to worry about a place to live... More
Answered By: glenn - 9/27/2007
Additional Answers (5)
You need to read the papers you signed for. Sometimes there is a penalty for paying your mortgage off early. But paying it off early will save you interest payments. When you make an overpayment or an unscheduled payment make sure it is noted that the payment is going towards the principal. Otherwise your payment will... More
Answered By: haileygirldb2002 - 9/27/2007
 
The more of your principal balance you knock off up front, the more money you'll save in interest charges in the long term. I imagine that it depends on the terms of your loan so be sure to check all that paperwork, but I *think* under most circumstances, they can't penalize you for early payment... More
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Answered By: Dan of Toasters - 9/27/2007
 
Talk to your mortgage holder and see if you have a principle only payment option on your mortgage or early pay off penalty... More
Answered By: Wizard Of OS - 9/27/2007
 
First thing to do before you decide on where to spend the money is to talk to a CPA to figure out what your tax impact may be. Then sit down an list out any debts you have at this time and the interest rates you are paying on each item (credid cards, car loans, personal loans, student loans, mortgage). First thing to... More
Answered By: Cisco - 9/27/2007
 
Call your mortgage company and verify if your have prepayment penaltys. Also, with paying such a large amount you will save on interest. You may qualify for a recast or reamortization. Where they will recalculate your payment over the remaining term based on the lower balance. Your payments will be lowered as well... More
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Answered By: Gene and Allum - 9/27/2007
 
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