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How to Calculate Mortgage Payments
It’s Tuesday and I just wanted to do something different and answer a question via Video.
I recently worked with a young couple who was unsure of moving forward on their dream house because they offered $200,000, but the seller would only go as low as $210,000. It sounds like a big gap, but how many of you really know what an additional $10,000 over 30 years equates to in monthly mortgage payments? Would it surprise you if I said around $40 give or take? Imagine giving up your dream home for a measly $40.
I want to take the guesswork out of home buying. I want my clients to be knowledgeable so that when they buy a house, they know exactly how much they can afford.
That’s why I proposed this question to Brandon Andrews at Guild Mortgage so that I could get an experts take on just what an additional $10,000 would mean with today’s rates. Check out his answer below…
Buyers have a false impression that increasing their loan amount and borrowing more money will increase their payments significantly. Where the truth is, per $10,000 financed with a 4.25% rate over a 30-year term the monthly payment only increases by about $40,00 per month. That’s only $1.33 per day and could cost you from living in your dream home.
I have included a simple mortgage calculator below so that when you’re in the middle of a heated negotiation you can quickly calculate your expected mortgage payments and realize that your dream home is well within reach.