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Rate cuts

What do rate cuts do for a homeowner or someone looking to become one…

 

As you likely know already we received an emergency rate cut earlier this week, and will probably see another in the coming week and in the future. Which means lower rates for most loans, such as car loans and credit cards. What do they mean to homeowners and future homeowners? Quite a lot, a home is most peoples largest investment and largest debt. So the rate on your home loan can change your monthly payment dramatically.

Here are some examples on how your mortgage interest rate can change your payment. Based on a 30 year fully amortized loan, not including taxes and insurance.

 

Loan amount     monthly payment at     7.00%          6.50%           6.00%    

        

 $150,000                                           $997.95        $948.10        $899.33

                                                monthly savings      $49.85          $98.62

                                                 yearly savings       $598.20        $1,183.44

                                                

 $250,000                                           $1,663.26     $1,580.17      $1,498.88

                                                 monthly savings     $83.09          $164.38

                                                  yearly savings      $997.08         $1,972.56

 

 $400,000                                           $2,661.21     $2,528.27      $2,398.20

                                                 monthly savings     $132.94        $263.21

                                                  yearly savings      $1,595.28      $3,158.52

 

 $800,000                                           $5,322.42     $5,056.54      $4,796.40

                                                  monthly savings    $265.88        $526.02

                                                   yearly savings     $3,190.56      $6,312.24

 

Every little bit makes a difference in your loan… So if you are looking to purchase a home or refinance be sure to get the best rate possible!

 

Posted on Saturday, January 26, 2008 at 02:04PM by Registered CommenterMegan Schomer | CommentsPost a Comment | References34 References

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