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If your rate is fixed, it will not increase or decrease for the life of your mortgage if you have a fixed rate mortgage. Your interest rate is an extremely important number, because it controls how much interest you’ll ultimately pay on the loan. Be aware that this isn’t the total amount that you’re going to have to pay on a monthly basis (mortgage insurance, property tax, homeowner’s insurance, and other factors will influence the totally monthly payment). Prepayment penalties may be issued by your mortgage servicer for paying your mortgage off earlier than the term you agreed to, because they expect to recover all their costs over the term of the loan through interest.

Over the life of the loan, the portion of money paid towards the interest and money paid towards the principal will change. Part of each monthly payment goes toward your loan principal, and part goes toward interest. The main advantage of your 30-year mortgage will be the relatively low monthly payment that might allow you to buy a bigger house and borrow more money than you would be able to afford with a 15-year loan. — wherein most buyers say they simply can’t afford the higher payments required by a 15-year mortgage, they can do something wise with their 30-year option: if they have the means to comfortably make larger payments toward the principal each month and pay the loan down faster, they could be saving money in the long run.

A big part of your credit score is based on the ratio of the amount you owe compared to the credit you have available. Not paying your bills or not paying them in a timely manner can impact your credit score negatively. Your Score Opening several new lines of credit in a short period can have a negative impact on your credit score as it may be seen as an increased risk for lenders. However, getting pre-qualified by a lender for a home should not affect your credit score, but it will allow you to know how much house you can potentially afford.

Low interest rates typically mean that buyers have more purchasing power, and that home ownership is more accessible than ever before. Learning more about what low rates mean for your personal circumstances and mortgage possibilities will help you determine if the historically low mortgage rates we are experiencing are just too good to ignore. More choices for buyers mean that banks need to bring more to the table and that they need to compete for business; when rates are low, home refinancing becomes a popular consideration, as existing homeowners take advantage of the more affordable costs. If you are in the market for a new home or considering refinancing your existing home, you may be able to do so more affordably now than at any other time.