- Loan Amount – A more expensive home will have a larger loan amount unless you can make a large down payment. The higher your down payment – the lower your monthly mortgage payment.
- Interest Rate – Rate can greatly impact your monthly mortgage payment. On larger loan amounts a half percent can make a big difference. For example a $650,000 at 6% over 30 years has a payment of $3,897 principal and interest per month. That same loan at 5.5% has a payment of $3,690. That is a savings of over $200 per month by simply lowering your rate by half a percent!
- Term – The length of a loan can also make a huge difference in monthly payment. Borrowers that have extra money may want to have a 15 year loan in order to pay off a home sooner. For families that want to buy their dream home without tightening the budget there are 40 year terms available. In the scenario above the term was for 30 years. If the term was changed to 40 years the payment goes down to $3,352 at 5.5%. That is $500 less than the original quote!
By extending the loan term families can often afford the home of their dreams without stretching their monthly budget. Having all of your money go toward your home can leave people discouraged as disposable spending goes out the window. A mortgage banker experienced in providing Jumbo Loans can help by finding the lowest mortgage rates and longest loan term in order to keep your monthly mortgage payment down. There are ways to buy your dream home today and a good place to start is by talking to a mortgage lender. Discuss mortgage loan options now so that when you begin your home search you can confidently make an offer – knowing where your monthly mortgage payment will end up.