Loan prepayment refers to repaying a loan before the due date of the payment schedule. In the context of real estate, prepayment could mean paying off the mortgage or making additional payments in addition to the monthly mortgage payment.
Here's why loan prepayment can be important for real estate investors:
However, it's important to note that loan prepayment isn't always the best strategy for every investor. There may be prepayment penalties to consider, or the investor may get a better return by investing extra cash elsewhere. The decision to prepay a mortgage should be made in the context of the investor's overall financial strategy and goals.
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