Re: Should I make overpayments on mortgage?

Peter Saxton wrote:

On 15 Sep 2006 01:26:55 -0700, "Robert" <robertmlaws@xxxxxxxxx> wrote:
Ronald Raygun wrote:

That's nonsense. If making overpayments were "bad" in this way, then
"good" would be to underpay, or even better not to pay at all, not
even interest.

You mean an 'interest only' loan where the interest is rolled into the
capital. You'd rely on house values rising fast enough so that when
you sell the hosue the proceeds cover the debt that has, by then,
accumuated.

Sounds good to me.

What do you mean when you say: "an 'interest only' loan where the
interest is rolled into the capital"?

An "interest only" loan refers to only the interest being paid.

Yes, and specifically the "only" in "interest-only" means no more
nor less than that no capital is paid. :-)

In other words all you pay is interest.
Even more specifically, all *of what you pay* is interest.

That does not preclude the payments you make being less than the
interest charged, and a special case of that is that you pay nothing
at all, letting *all* the interest charged roll up into the debt, or
as Robert calls it, into the capital. :-)

Obviously the purpose of his quotes around 'interest only' was an
allusion to the improper nature of such an arrangement. To give it
its full name would be to call it a "not even interest only" loan.

.

Relevant Pages

  • Re: Blindly Into the Bubble
    ... pay their bills; so many default, because of overspending, (although I ... the Banks and other institutions were not allowed good profits, ... loan insitutions cannot afford to lend an ear to that. ... rate mortgages but the situation is far more complex. ...
    (soc.retirement)
  • Re: 1% Financing
    ... Paid off loan way, 10k you pay 3k taxes on, leaving you with 7k in your ...
    (rec.motorcycles.harley)
  • Re: TURMEL: Ben Franklin, Prof. Flaherty, on Death gamble
    ... > pay to build your house whether you pay $100,000 from ... > an interest bearing loan or a non-interest loan? ... > your new house. ... gives money its power is not depositors accounts. ...
    (sci.econ)
  • Re: the "subprime mortgage crisis"
    ... financial institutions to lend lots more money to low-income borrowers. ... made to people that normally would not qualify for a loan under the rule of ... left after you pay all your other bills. ...
    (rec.sport.football.college)
  • Re: the "subprime mortgage crisis"
    ... financial institutions to lend lots more money to low-income borrowers. ... made to people that normally would not qualify for a loan under the rule of ... left after you pay all your other bills. ... deserve to fail in business and go bankrupt. ...
    (rec.sport.football.college)