Chinese Association of Idaho State University (CAISU)
Know How Different Types of Loans Can Benefit You
Calculate your monthly payment if you pay Zippy Loan Review no points. In our example a loan of $300,000 that is fully amortizing at 6.875 percent will cost you $1,971 for principal and interest each month for 360 months. You paid nothing for this rate. Now for the clincher. Divide the points ($12,942) by the difference in the monthly payment and determine your break-even point. In this case the difference is $244 per month, and your break even will occur 53 months into the life of the 360- month loan. Your break even is therefore extremely compelling.
Over the life of the loan you will save $87,840 if you can just muster$12,942 in discount points today.Up for a bonus? Make certain that your banker characterizes every dollar as a discount point and not as an origination point. Then chat with your certified public accountant. I bet they will all be deductible! In conclusion, next time you are visiting with your mortgage banker, have him set out the lowest rate on the rate card next to the highest. Divide the difference in monthly payments into the points required to buy down the rate. If the break even is acceptable, go for the lower rate. Run your own calculation and make your own determination. Let the math drive your decision.
A recent report alleges that in spite of the price wars amongst the banks that the majority of them are not offering good enough incentives for those whose accounts are in credit. MoneyExpert claim that the average interest rates on credit have gone up in the high street banks but also profess that not enough of them are compensating their clients for prevailing during such a difficult economic downturn. It proposes that even though typically there has been a rise to 2% of credit interest rates - up from 1.6% last year - customers are still being offered a less than 1% rate by many of the banks on current accounts that are in credit.
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