When you start shopping for a mortgage, one of the first questions you’ll hear from any lender is: “What interest rate were you offered?” Interest rates are expressed as an annual percentage of the loan amount. For example, if you obtain a $450,000 home loan at a 7% interest rate, you’ll pay approximately $31,500 in interest during the first year. With most mortgage plans, each monthly payment includes a portion that covers interest and another that reduces your principal balance—so over time, your debt decreases and you pay less interest. In the past, mortgage rates stayed steady for years at a time, but today’s market is much more dynamic and sensitive to economic trends, inflation, and Federal Reserve decisions. In recent years, rates have fluctuated between 3% and over 7%, making financial planning and professional guidance more important than ever to secure the best loan programs and opportunities. Unlike the days of our grandparents, today’s buyers have access to a wide range of financing options, including low-down-payment programs, first-time buyer assistance, and special lending products tailored to different financial situations. You no longer need 50% down to buy a home—with the right guidance and a solid plan, homeownership remains an achievable goal in today’s market.
