Uncovered Lies!!
Your mortgage company is only telling you half of the truth.
For example: Loan amount of $400000 term of loan thirty years fix interest rate of 6%. The interest rate of 6% is only true if you pay off the loan in the first year.
But remember you are paying over 30 years. The authorization schedule allows the mortgage companies to front load the interest so they can earn 81% every month on your mortgage payment. The mortgage company want you to think they are charging you just a little interest Compare Mortgage payment Ratios over a five year period
For example: Loan amount $400,000 term 30 years fixed interest rate 6% monthly payment $2398.21.
This amount went to pay down your loan. Total principle paid over a 5 year period divided by total payments paid.
Total principle paid / Total payment x 100 = Percent, $ 27,783.13 / 143,892.60 x 100 = (19.3%).
Total interest paid over a 5 year period divided by total payments made over the 5 year period your lender’s profit.Total interest paid / total payments x 100 = Percent. 116,109.00 / 143,892.60 x 100 = (80.69%)
Your lender’s profit 81% of your mortgage payment every single month Mortgage Interest Calculations Mortgage Amount $400,000.00 Interest Rate 6.00% Term 360 Months Monthly payment $2,398.21 You are going to pay $863,347.00 for a $400,000.00 house. You will have to earn $1,105,084.00 Gross Income if you are in a 28% tax bracket You will have to earn over a million dollars in gross income to payoff a $400,000 house. The Cost of Borrowing Money.
Payment ratios are more important than the interest rate. Payment ratios defines how much of your mortgage payment is going to interest to pay the lender, and how much of your mortgage payment is going to principle to pay down your loan balance.The banks have over played the fix interest rates The banks just wants you think you are paying a little interest. They don’t want you to know the payment ratios.
