High Rates Hurt Borrowers
I used to be a loan officer and a document specialist in the mortgage industry before the mortgage bubble burst and Countrywide went bankrupt. When President Biden was sworn into office January 20th 2021 mortgage rates for 30-year fixed loans were just under 3% and had been mostly under 4% percent since 2012. On a 30 year fixed loan of $240,000, 3% used to mean a payment of $1,012 a month for principal and interest, at 4% it would have been $1,146 a month. But with current rates averaging 7.5%, the same 30-year loan requires a payment of $1,672 a month, $660 a month more than at 3% and $526 more than at 4%. In the first scenario 360 payments of $1,012 totals $364,320 minus the principal of $240,000 means you would have paid $124,320 in interest over the term of the loan. In the current scenario 360 payments of $1,672 totals to $601,920 minus the same $240,000 principal means you now have to pay $361,920 in interest over the term of the same 30...