How do home loans work?
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Hey there,
Hey there,
Lets say for example John Smith takes out a home loan of $500,000 for 30 years at 8.6% per annum.
What does it mean by “… at 8.6% per annum”? Like does he have to pay 8.6% of the 500K each year or somthin?
Cheers, totally clueless about loans
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That means he’s paying 8.6% interest on the remaining balance in the course of a year. The 8.6% is broken up into twelve payments, so he’s not paying the full 8.6% every month. His loan “amortizes” over the course of 30 years, meaning it pays off.
At first beucuase the balance is so huge, 95% oif his payment is paying only interest. But the other 5% will go towards paying down the balance (called Principal). As the balance goes down, less of his payment goes towards interest and more goes towards the balance.
The last few years most of his payment will be in paying off his loan and less on interest. This is why paying extra in the beginning of your loan makes a HUGE difference.
If someone makes 1 extra payment every year, your 30 year mortgage turns into a 22 year mortgage.
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Hi.
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I got a loan of $150,000 from an agency online and i was lucky not be scammed.
Contact them at email:globaly_aquinted_org@yahoo.com interest rate of 0.2% is simply great.they use a yahoo email account on our request because its makes contacting them easier