In this era of double-digit inflation and high mortgage interest rates, many aspiring homeowners (as well as present homeowners) are searching for ways to mitigate the financial sting of skyrocketing housing costs. Prepayment of mortgage loan principal is a simple, little publicized, but completely legal technique which allows certain mortgagors to completely repay their mortgage loans, usually within half of the original loan period. This technique simultaneously trims thousands, and more often tens of thousands, of dollars from the interest charges the mortgagor would ordinarily pay under the terms of his mortgage note.
James E. Anderson,
Scheduled Principal Prepayments: The Residential Mortgagor's Financial Response to Front-ended Interest Charges,
U. Rich. L. Rev.
Available at: http://scholarship.richmond.edu/lawreview/vol15/iss4/8