Little Bit Farm: hope you, or any one else with similar experience will answer: Can you pre-pay or make extra principal payments on an FHA mortgage loan? Or does this option apply only to conventional loans. Thanks for your help. stef.

-- stef (sbrogers@csonline.net), September 28, 2001

Answers

Hi Stef, Usually it is possible to prepay an FHA loan, but the best way to find out is to check with your lender. Sometimes there could be something in your contract that could prevent that. Most FHA loans can be prepaid though. It doesn't hurt to ask. A single prepaid lump sum per year can substantially reduce your interest costs. An extra amount paid every month works well too. If you can't make extra payments you can always refinance. In fact this would be a good time as rates are dropping. We made an offer on a place tonight, everyone please pray for us. Thanks.

Little bit Farm

-- Little bit farm (littleBit@compworldnet.com), September 28, 2001.

Your contract should state if there is a penalty for prepayment or not. Little Bit Farm congrats, I hope you get it. We close on ours on Oct. 8th. Not a big place 1.18 acres with 3br/2ba mobile on is but it will be paid off on or before 5 years. Hopefully, Lord willing, we can also get some of the land that is behind us for sale.

-- stephanie nosacek (possumliving@go.com), September 29, 2001.

Way to go ladies. Hope you both enjoy your places and lead that life you have always dreamed of out in the country.

Talk to you later.

-- Bob in WI (bjwick@hotmail.com), September 29, 2001.

We just paid off our FHA loan (early!) and it was clearly stated in the contract that there was no penalty for early payoff.

-- Eric in TN (eric_m_stone@yahoo.com), October 01, 2001.

Sure you can make extra payments on an FHA loan (no penalty). They want you to make the extra payments in the same amount as the principal payment for the month. In other words make your extra payment the amount of the next months principal.

The same is true for VA loans except the VA lenders will take one principal payment or extra payments in $100 increments.

-- Ed Copp (OH) (edcopp@yahoo.com), October 05, 2001.