How Does Mortgage Interest Work?

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Everything you need to know about how mortgage interest rates work before you get a home loan!
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00:00 Intro
0:25 What is an interest rate anyway?
1:05 APR vs interest rate
2:05 Fixed vs ARM
2:58 The interest rate doesn't tell you this
3:48 What determines your rate?
6:29 Points vs credits
8:06 How to calculate interest payments
8:36 How your payment is made
8:49 How your interest payment changes
9:40 30 yr vs 15 yr loan
11:12 Should you pay points?
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• Should You Pay Points ...
Hey, my name is Kyle and I'm a Loan Advisor serving Tennessee, Florida, and Ohio. I help you get a crystal-clear home loan so you can win the house you love.
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Опубликовано:

30 июл 2024

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Комментарии : 50

@WinTheHouseYouLove 4 года назад

Timestamps! 0:25 What is an interest rate anyway? 1:05 APR vs interest rate 2:05 Fixed vs ARM 2:58 The interest rate doesn't tell you this 3:48 What determines your rate? 6:29 Points vs credits 8:06 How to calculate interest payments 8:36 How your payment is made 8:49 How your interest payment changes 9:40 30 yr vs 15 yr loan 11:12 Should you pay points?

@WinTheHouseYouLove 4 года назад

🎧 Listen To The Podcast plinkhq.com/i/1493715474 💰 7 Proven Ways To Save Thousands On Your Home www.winthehouseyoulove.com/free

@anaka9779 10 месяцев назад

You explained so simply what I couldn't figure out in the first 60 seconds of the video. The entire video is very informative and you explain everything so well. I typically never leave comments but I really wanted to thank you for making this.

@WinTheHouseYouLove 10 месяцев назад

This is sweet, thank you!

@IAmMzJess 3 года назад

Thank you for this breakdown. So educational I learned a lot!

@WinTheHouseYouLove 3 года назад

You're welcome! I'm glad to hear and thanks for watching!

@santaniebrown3721 3 года назад

I love how detailed and understandable this video is. 🙏🙏

@WinTheHouseYouLove 3 года назад

Thank you!

@sweetandsourluna 2 года назад

Thank you so much I am trying to pay down my mortgage as fast as possible and your explanation helped me understand how the interest is calculated.

@WinTheHouseYouLove 2 года назад

Glad it was helpful!

@kevinadams3368 4 года назад

I really do appreciate all the information thank you.

@WinTheHouseYouLove 4 года назад

You are so welcome!

@elsievaenz9531 4 года назад

This guy is awesome, great information thank you 🙏

@WinTheHouseYouLove 4 года назад

Thanks so much! :)

@stacysmith7387 Год назад

Excellent and clear explanation. Thanks!!!❤️

@WinTheHouseYouLove Год назад

My pleasure!

@GG-vh8kz 2 года назад

Excellent videos. Keep up the good work.

@WinTheHouseYouLove 2 года назад

Thanks, will do!

@AndreaSanchez-dz6pv 4 года назад

Your videos are so helpful. I’m 25 and hoping to to buy a house by the time I’m 30 so learning the ins and outs of what to expect is really helpful for a Type A person like me. Unfortunately, I live in CA where a house costs at least $500k-$600k and on a $55k salary that’s somewhat discouraging. But these videos kind of motivate me to at least try to make my way to a 20% down payment. Between you and Dave Ramsey I’m sure I can figure something out. Thanks for the content!

@WinTheHouseYouLove 4 года назад

Hey Andrea! I made a personal video reply for you: m.bixel1.net/tsiuxe

@josephhorton9512 4 года назад

Completely unrelated comment. What brand are your glasses? Also, great content! Keep the videos coming.

@WinTheHouseYouLove 4 года назад

Thanks so much!! Gerret Leight Winward

@josephhorton9512 4 года назад

@@WinTheHouseYouLove Appreciate it!

@ThatgirlWes 4 года назад

I want to buy so badly, but hearing numbers like that is so depressing. You could buy another house with what you pay interest during the left of the loan. My alternative would be to buy a house cash, but I would be saving for a lifetime for it. Can you do a video on the difference between purchasing a condo and a single family home if there are differences? I’ve been leaning towards buying a condo or a townhouse.

@WinTheHouseYouLove 4 года назад

It can definitely be a bit disappointing. On the flip side, renting is no better :) The best strategy would be to take a mortgage and pay it down as aggressively as possible, almost as if you didn't have a house yet and were saving up cash for it. I sure can, I'll add it to the list! I do have a video on HOAs that might be helpful: HOA Pros And Cons - Is An HOA Worth It? ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-35LncNveCRI.html

@finlayweber3876 3 года назад

Thanks for this video! I only have one question though. You only mentioned how much interest you get to pay every year (and you broke that down to monthly cost) but you did not mention how the original principal get paid how? How is that factored in to yearly (and monthly payment) ?

@WinTheHouseYouLove 3 года назад

Principal is paid based on an amortization table, the math is a bit more difficult to do by hand

@nttwashere 3 года назад

Hi Finlay! I generally don't use annual calculations because every month your principal decreases. So, for the $100,000 @4% example, an amortization schedule makes the monthly payment $477/mo. On the first month, the interest is $100,000*.04*(1/12) = $333.33. It's the simple interest formula, where time is in years and you divide by 12 because we're talking about monthly payments. So, of the $477/mo you pay, $333.33 goes to the bank as interest, and the remaining $477 - $333.33 = $143.67 goes to lower the principal, making the amount now $100,000 - $143.67 = $99,856.33. Not a whole lot, but it's a start! Second month, same math: $99,856.33*.04*(1/12) = $332.85

@delt19 3 года назад

The example this guy used in his video is not the right way to demonstrate how much interest you'll pay for a mortgage in a given year. His example shows how much interest you'll pay for an interest only facility, a structure that is more typical in commercial lending than mortgage lending. Although construction lending does include i/o terms.

@brianfuller7888 7 месяцев назад

Thanks Kyle. Question- I have around 250k on my principle property and an investment on the side. If I was to go to the bank and put a lump sum payment on my principle property say $50k, would I have grounds to negotiate the interest rate based on my risk reducing somewhat? Thanks

@WinTheHouseYouLove 7 месяцев назад

Hi! Unfortunately no. The note has already been “set in stone”. To change the rate, you’d need a refinance

@LadyBugShaun 4 года назад

Can you please explain how a lower interest rate could potentially cost more than a loan with a higher interest ratwover time? The fees are one time fees, correct?So I'm not sure how that can impact the loan for the long term. Thanks

@WinTheHouseYouLove 4 года назад

Here's a personal video reply to clear things up: m.bixel1.net/ozix8b

@maritzalopez5719 4 года назад

Win The House You Love so does that only apply to FHA loans?

@elsievaenz9531 4 года назад

Win The House You Love thank you 🙏

@LadyBugShaun 4 года назад

How would one "buy out" an interest rate?

@WinTheHouseYouLove 4 года назад

Here's a good video: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-jvZSoYnUa2A.html

@erickjuma7643 3 месяца назад

Who owns the houses that get sold on mortgage terms?

@WinTheHouseYouLove 2 месяца назад

I'm not sure if I'm understanding

@raghuyadav6729 3 года назад

why are my numbers not matching with yours? 200,000 at 4% for 30 years - > (200,000 * 0.04 * 30 ) + 200,000 = 440,000 but you got something like 465k what am I doing wrong?

@WinTheHouseYouLove 3 года назад

Can you point me to a timestamp in the video where I mention those numbers? I'm not sure what you're asking about.

@raghuyadav6729 3 года назад

@@WinTheHouseYouLove 9:50 thanks for quick reply

@sammyboo1992 3 года назад

Hey, question. I applied for a home loan and the lender went over monthly payment (est. 1700), approved loan amount (320k), down payment & closing costs (est 23k), Credit score (801), but mentioned nothing about interest rate. I was lost. When I asked her, she said interest rate is not important as it changes over time & will change at closing. But if I would like to know it would be around 2.7 or 2.8 percent and its not much of difference if it was less, my monthly payment will go down only about $19. I was a bit confused as I thought whether it was 2.8 or 2.4 would be something to tell me as it matters. It sounds like a good conventional loan, but I'm still iffy. Is this accurate? Should I shop around?

@WinTheHouseYouLove 3 года назад

Hmmmm, yeah I'd work with another lender.

@delt19 3 года назад

The lender has to provide you a loan estimate. This is required by law. Only "going over the numbers" like that is not acceptable. The LE will contain all the information you need to know about the cost of your mortgage.

@_ShaDynasty 3 года назад

9:45 it's crazy to realize that poor people need to pay about 3x more for a home than rich people .

@WinTheHouseYouLove 3 года назад

There is an assumption in your comment that 2 people with 2 different incomes would have the same loan just with different terms. That should not be the case.

@_ShaDynasty 3 года назад

@@WinTheHouseYouLove no, rich people pay cash

@astridgalactic9336 3 года назад

@@_ShaDynasty Unless it's to their benefit for various tax write-offs. For the very wealthy, there are ways to pay much less in taxes when you are in debt, which makes their total personal bottom line more profitable because they get tax breaks that we don't get. But you need to be very wealthy to play that game without screwing yourself up.

@ismeisme6441 2 года назад

Jason, this is true. Depends on the factors in your mortgage, by the time you payoff. Today interest rate your total interest payments for the life of your mortgage it may be around 70% to 100% of your loan amount. Also mortgage buyers pay more money in closing, not only charged by the lenders also by the government.