daily simple interest

Guest 0.10 Dollars($)

I am thinking of refinancing my house and would like to know if the interest is figured as daily simple interest what are the pros and cons.

Niicss · Joined: 03 Oct 2005 Posts: 927 137.44 Dollars($)

Welcome,

Daily simple interest is similar to the simple interest method except that the interest rate is calculated on the actual balance every day. Now as you are going for refinance, how long have you taken the mortgage? If you have taken the mortgage within a year then you may not refinance the mortgage now.

Let me know if you have any more queries.

gmakerley · Posted: Thu Apr 10, 2008 6:06 am Post subject:

daily simple interest can be most advantageous to you if you prepay by adding to your regular monthly payment. further, if you make payment prior to the due date each month, you will reduce your interest costs.

by the same token, you need to be careful not to make payment after the due date if you can avoid that. the calculation of simple interest will result in a varying amount of interest/principal breakdown with each payment. the later you pay in each month, the more interest you will be paying.

if you have the facility to make early and partial payments (like splitting up your monthly payment into weekly amounts, for example); this would be a very cost-effective way for you to reduce your interest expense and prepay the entire balance much earlier.

All times are GMT - 7 Hours

Page 1 of 1