Your Questions About Home Loan Interest Rates

Sandra asks…

What is interest loan rates?

I do not understand what Interest Loan Rates are…

John answers:

You borrow money for a house, or a car or a holiday – anything.

The money you borrow comes at a cost. The bank will charge you a fee (usually calculated daily) on what you borrowed.

So if you borrow $100.00 and the bank wants to charge 10% interest, then you will be paying $10.00 per day or week for the privilege of borrowing money from them. There can also be Additional fees on top of this such as withdrawing money out or annual account keeping fees.
That’s why people watch the home loan rates so closely because if you borrow $400,000.00 for a house and you are being charged at 10% over a year that is one hell of a lot of money.

Don’t ever take out a loan for a holiday or a car (save up the money instead)- these are considered bad debts. And don’t ever borrow more than you can afford. Don’t forget the interest rate on a home may be at 5% when you buy the house but it can change very quickly to a lot more if the economy changes.
If you buy a house you need to make sure you can afford to repay it if the interest rates hit 10% or more – otherwise the bank will come and take your house off you!!!

Credit cards are charged at an enormous rate in some places. In Australia it is usually as high as 20% or more calculated monthly – if you owe money on it.
We use our credit card but have it paid off directly each month so there is a zero amount in debt – so we don’t get charged any interest, just a bit per year to keep the card.

So borrowing money sounds easy, but it can become so expensive that it is difficult to pay your debts off. Hope this helps!

Joseph asks…

have you bought a home this month? with a conventional loan? what’s your interest % rate?

i think my mortgage broker sucks, i’m trying to get a loan approved for $42,000 with a 30 yr fixed rate conventional loan. I’m in las vegas. I have a credit score over 700, the best she can get me is 7.5% am i getting bent over? or what? what are they telling you??

John answers:

I agree, that loan sucks. However, she found a bank willing to do a really tiny loan for 30 years. THAT is amazing. There are few (as in I am shocked) banks willing to do this.

The interest rate is so that they do not loose money just mailing you the bill, most banks do not both with these loans because it costs more to maintain the records then you pay in interest.

You might be stuck because she found the only bank willing to deal with the loan.

Donald asks…

how much would interest rate be for me on a home loan.?

im 22 and my parents would co-sign with nearly perfect credit scores.
it would be a 30 year loan for about 130000

John answers:

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Loans between $2,000 USD and $5,000,000 USD are given at 3% interest rate (Flat Rate) for a period of 1 to 10 years as the case may be. Repayments will be made in monthly instalments which will commence three (6) months after the receipt of the loan. Details of the repayment plan will be sent to you as soon as your loan application is approved.

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John asks…

Home equity loan?

I own a condo worth about $70,000, with no mortgage. I have some school debt and a car loan I would like to consolidate, maybe small home improvements. I would like to borrow…maybe $15,000? Is this the best option for me with the rate cuts and everything?

John answers:

If you are a first time borrower of a home equity loan it is imperative that you have a checklist of essential questions that you need to ask each and every lender. The answers to these questions will provide a valuable reference to base your comparisons on. What’s the interest rate? Knowing this is crucial. The interest rate will determinepercentage by which the adjustable rate will change. What is the Annual Percentage Rate or APR? The APR on the home equity loan will determine the yearly payment you will need to make towards this.The higher the payment in terms of points, the lower is the interest rate.

Mandy asks…

How does the interest rate lock work in a home loan ?

I am a first time home buyer and have a quick question about the interest rate lock. (Chicago IL USA).

1) Lets say I lock a rate of 5% today(30 yr fixed) with a bank for
about 60 days. Now if the rate drops below 5% within the 60
days , will I be getting the lower rate as well ?

2) I have put an offer on a short sale property and waiting from
the sellers lender to hear about the offer. Now lets say I lock
for 60 days for 5% and if I will not hear about my offer within
this 60 days, will I be able to extend this (or) create a new
rate lock for another 60 days ?

3) Are there any pros & cons in locking more than 1-2 times ?

John answers:

You will have to talk to your lender. The idea behind locking your rate is that you will keep a low rate if interest rates go up. You’ll have to ask your lender what will happen if rates go down again. It will also depend on the lender’s guidelines as far as whether you can extend the lock or not. I’m sure different lenders have different guidelines so only your lender can answer your questions accurately. Don’t feel badly about calling the lender and asking. He/she isn’t going to make anything if you don’t get the loan or if you go elsewhere. He/she is there to help you.

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