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Find out more about Spencer: Spencer Rascoff is COO of Zillow.com, one of the leading real estate sites. He’s a real estate junkie who goes to open houses for fun. Follow him on Twitter. |
Homebuyers generally obssess about what to pay for a house, and with good reason. But home prices are only part of the issue. As important (and in some ways more important) are the terms of the mortgage you're able to get.
Here's an example:
A $400,000 mortgage on a $500,000 home will run you about $3100 per month at a 6.5% interest rate on a 30-year fixed mortgage.
But at 5.5%, the same house will cost you about $2800 per month, a 10% discount. That's like being able to pay $450,000 for the home instead of $500,000 (ignoring tax differences). Mortgage rates matter!!
Any good mortgage calculator can help you walk through the math for your specific example, and you can find current mortgage rates.
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