What is the interest rate on a mortgage for?
Answers:
so the hill can make money out of the loan
It's the percentage you pay to the bank for letting them make a contribution you money. Payback.
And always get a FIXED RATE loan. You can refinance if a better rate comes along surrounded by a few years. Adjustable rate loans are why so many people can't afford their houses anymore. Sure it's lower, because the hill can stick it to you later!
One word of advice: Buy a house you can afford, not the one they qualify you for. I own excellent credit and with my salary qualify for similar to a $400,000 house, but I bought a 2story duplex fixer upper for less than $100K ten years ago and now it's pretty nice, I can afford it (even beside my husband out of work) and theres room for all four of us and 5 pets. Don't overlook the little houses, they're goldmines sometimes.
That is what you are paying for the privilege of borrowing money.
TO PUT MORE MONEY IN THE POCKETS OF EVIL, GREEDY, IMMORAL AND CORRUPT CEOS!
To determine to cost of borrowing the money from the bank.
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