Interest Rates and How They Change
As you start shopping for a home loan,
your first question for the lender will most likely be, "What's
your interest rate?" or "How much do you charge?"
Usually interest rates are expressed
as an annual percentage of the amount borrowed. If you borrowed
$120,000 at 10% interest, you would owe interest of $12,000
for the first year. With most mortgage plans you would pay it
at the rate of $1,000 a month. You would also send in something
each month to reduce the principal debt you owe, then the next
month you would owe a little less interest.
Interest rates have dropped and reached
the lowest in decades. In this day and age home buyers seem
to have the most favorable conditions for mortgage borrowing
to be able to purchase that special home they so desire.
