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    Mortgage Math – the Power of Compound Interest

    By December 30, 2021February 3rd, 2022No Comments

    It is that time of the year when temperatures rise, and sellers start putting their homes on the market.  Even though inventory is low – so are the interest rates!

    You can lock in rates now and most banks will honor a lower rate if the interest rates drops, however, if you lock the interest rate it will not increase!  Pay attention to the expiration date!

    The average sales price in Leon County is over $215,000.  Let us say the buyer puts down 20% on the loan and the mortgage is for $172,000. Here are the estimated costs and the total amount the buyer will pay for the mortgage over the life of the loan.

    30 Year Mortgage
    Interest rate Monthly payment Total mortgage
    5% $923 $332,400
    4.5% $871 $313,740
    4% $821 $295,616
    15 Year Mortgage
    5% $1,360 $244,830
    4.5% $1,316 $236,842
    4% $1,272 $229,007


    Some additional costs that *may* be added to your monthly payment and/or closing costs include:

    Taxes                    HOA/COA dues                 Repairs

    Insurance            Renovations                      Transfer fees

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