Do You Know Your Mortgage Rate?Posted by Ansley Atlanta 04/14/2019
According to Bankrate, nearly a third of all homeowners in the U.S. have no idea what their mortgage interest rate is. Why is that important? Understanding your interest rate is a crucial part of home ownership because even the smallest rate difference can end up costing tens of thousands of dollars over time.
For example, with a $200,000 home, a 20 percent down payment and a 30-year mortgage – an interest rate of 3% translates to $82,843 in interest over the term of the loan. A rate just 1% higher would cost $114,991 in interest — an increase of over $32,000. Working through an exercise like this is even more critical for homeowners thinking about an adjustable-rate mortgage!
Knowing how interest rate changes affect different loan products is also important. On a $250,000 loan, paying 4.3% for 30 years amounts to $195,000 in interest, while the same amount financed for 15 years at 3.5% equals $72,000 – more than $100,000 in savings over the life of the loan!
Bottom line, if you don’t know your mortgage interest rate – find out! If you have questions about this, or any other home ownership issues, please contact us – we’re here to help!