Boston condo owner and buyers, do you know your mortgage rate?
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 Boston condo for sale ownership because even the smallest rate difference can end up costing tens if not hundreds of thousands of dollars over the life of the loan.
A Boston condo example
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