Interest Rates really do affect your Mortgage Payment |
| Consider a person buying a house, what is more important further negotiations to lower the purchase price $500 or accepting the current offer? "Jim, that's easy, always go with the best (lowest) price!" Let us say the offer came to the real estate agent Tuesday and by Thursday final agreement and acceptance occur. Not bad saving $500 for just 2 more days of negotiations. The final offer accepted was $122,000. Tuesday the interest rate for a 30 year fixed loan interest rate was 6.25%. It is now Friday and the agent has faxed the contract to the mortgage company so the loan can be "locked." The agent discovers that the interest rate has gone up over the past few days to 6.5%. Let us do a little math. The payment on the new contract price for just principle and interest is $772. But, the interest rate on the $122,500 offer at the previously available interest rate would have been $754. The extra cost on the mortgage payments after 10 years will be $2,100. In fact $500 the difference in the price of the two offers is "made up" in just a little over 2 years of payments. Lesson of the story - interest rates can have a larger effect over time then small changes in the contract price. It is most important to be mindful of interest rates and the changes they can have on your mortgage payment especially as you negotiate your contract. |
| Interest rate commentary (Moving.com) provides a daily assessment of the mortgage market and provides their recommendations based upon an analysis of the data. But, If the rate you are offered is good then it is problem an unwise decision to gamble and wait for a better rate. |
| Mortgage Loan Payment Calculator |