Looking for an affordable home

Yesterday we commented that Bank Interest Rates are at record lows.  Here’s a fascinating bit of information that virtually everyone overlooks:

  • Bank Interest is the cost of borrowing money, it represents the bank’s costs, their profit, and what is allowed within the law.
  • Bank Interest is almost always the LARGEST single expense in building a home!
  • You will pay the bank more for your new home than what a Modular Home costs.
  • You will pay the bank much more for your new home that it would cost to stick build.

So…….., if you biggest expense goes down that is a significant factor to consider. 

When researching mortgages, you will here a lot about POINTS and of course you wonder that a Point is and how does that impact you.

  • A POINT is one percent of the mortgage’s total.  So, if you are applying for a $250,000 mortgage ONE POINT would be $2,500 and two points would be ….., and so on.  It is simple math that you can do.
  • A Point represents Bank Profit.  Remember, the greater the risk a business takes the greater their profit.  So, if you pay the bank upfront that lowers their risk and as a result the rate goes down.  That is a huge generalization but basically the underlying truth.
  • The advantage of paying a point is that usually it will lower the interest rate and therefore lower your monthly payment.
  • The disadvantage of paying a point is that it is more upfront money you need to pay.

Actual numbers.  If you borrow $1,000 at today’s rate of 3.625% the monthly payment is $4.56  (Remember that is $4.56 for each and every One Thousand Dollars)  At the end of your mortgage you will have paid back $1,641.60

Remember we mentioned a mortgage of $250,000  To pay off that mortgage it will cost you $410,400 or $160,400 IN INTEREST.

Now do you see why interest is so very very very important!  Right now interest rates are at record low rates.  This is a great time to save a lot of money!

Can Vermont Modular Homes help you?  Give us a call at (802) 985-5855

ALSO………….., stay tuned to our blog posts, we are going to be providing some fabulous offers so that you will save thousands.

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