MHQ - Mortgage HeadQuarters

Over the life of the mortgage, the amount of a mortgage payment is composed of a combination of interest and principal repayment. Initially, your payment will be primarily interest, with a small amount of principal included. As the mortgage matures, the principal portion of the payment will increase and the interest portion will decrease. So, why do you pay so much interest in the early years of a mortgage loan ? Here are four reasons: 1. The interest owed starts to accrue from the day the loan is made.  When you deposit money at the bank, you naturally expect to start earning interest on the balance right away. It's exactly the same for lenders; they expect to earn interest on the balance as soon as they make a loan. 2. Interest diminishes along with the loan balance.  On a typical loan, you pay principal and interest each month. Over time, as you pay down the principal, you owe less interest each month, because your loan balance is lower. So, more of your month...

It's pretty amazing that a rate increase of just 2% can impact affordability by as much as $40,000. Rates have been artificially low for some time, but we've been seeing rates on the rise. Every smart consumer knows to ask the question "how can I get the lowest interest rate possible?". Unfortunately, lowest isn't always the best. This week, we're sharing with you some details on what you need to know about the real cost of owning a home and factors that may impact your interest rate. Lowest Isn't Always Best The lowest rate certainly sounds best. But did you know the lowest rate doesn't always mean the lowest cost? Mortgage interest is just one component of the real cost of owning a home. Interest rates are a reflection of expectations for inflation and the supply/demand equation for money. Rising rates typically mean rising inflation, too. When inflation occurs, the value of your home will typically rise. You can subtract that increase in va...