![]() If the same $320,000 loan above has a 4% rate, then you’ll pay $12,800 for the first year in interest repayment (I) Interest: The amount of interest you’ll pay to borrow the principal.If you buy a home for $400,000 with 20% down, then your principal loan balance is $320,000 (P) Principal: The amount you owe without any interest added.Your mortgage payment consists of four costs, which loan officers refer to as ‘PITI.’ These four parts are principal, interest, taxes, and insurance. Here are tips to get your best mortgage rate Shop for a lower rate: Rate shopping doesn’t have to take long, and it’s well worth the savings.However, you will pay more in total interest over the life of the loan Longer loan term: A longer loan term means lower monthly payments.Avoid private mortgage insurance: When you put at least 20% down on a conventional loan or 20% home equity on a refinance you can avoid paying monthly private mortgage insurance premiums (PMI).Also, the best mortgage rates generally go to borrowers with larger down payments, among other qualifying factors Bigger down payment: Putting more money down means you’ll borrow less.Lower purchase price: The less you borrow, the lower your mortgage payment.If your mortgage calculator results are not yielding the lower monthly payments you hoped for, here are several techniques to try: To find out how much house you can afford based on your monthly budget. ![]()
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