According to this mortgage calculator it is. Just bear with me on these simple and straight forward numbers. Lets assume you are taking out a loan for 0,000 for 30 years with a fixed rate of 6.5%. According to http://www.mortgagecalculator.org/ that would equal a monthly payment of ,333.70 and a total loan cost of 0,133.47. This is almost THREE times the original loan amount. I understand interest…..but DAAAMN!!! That’s like buying a 0 TV through Rent-A-Center and paying 0 for it in the end, NO ONE in there right mind would do that…..yet its ok to do it for a home? Am I missing something or does everyone end up paying at least double the cost of their house. I understand there are other details and variables and such but in all honesty they dont make that much of a difference. For example, if you put down a ,000 down payment and only borrowed 0,000 then you still end up paying over 0,000 which is more than twice the cost of the loan.
Is it correct for a mortgage to be more than twice the cost of a home?
5 Responses to Is it correct for a mortgage to be more than twice the cost of a home?
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Yup, that’s right. You always have the option of paying cash for your house instead.
so now you know why the mortgage business is so lucrative and also why mortgage companies who have a lot of foreclosures really aren’t loosing all that much money.
originally it was assumed that the new owner would realize equity over time–but how the hell much equity will you realize in 30 years at this interest rate?
we haven’t even talked about property taxes yet!
You are missing a couple of things. For one, there is no way around paying interest on a loan, but there are ways to minimize the interest (shorter loan terms). Also interest is tax deductible! So all that interest that you pay the lender is actually saving the number of dollars you send to uncle Sam each year. In a sense, depending upon your tax bracket, 20-35% of those dollars you spend on interest remain in your pocket at tax time.
Yeah that sounds about right. You want to figure that every payment that you make adds a dollar to the principal….the rest is interest.
So yeah if you pay over 30 years then yeah. But if you get a loan without a prepamet penalty and pay ONE whole extra payment a YEAR you can usually knock that down by almost half.
But yeah if you don’t make extra payments you pay out the nose for a home.
Hi! Dear you can check for this in some of these sites so that you can have clear idea
http://mortgagelendersweb.com/