When looking for houses one term keeps popping up: interest rates. They can seem like a complex financial jargon, but understanding how they work is crucial for making informed decisions and navigating the mortgage landscape.
What are Interest Rates?
Simply put, the interest rate is a percentage of the loan amount that you pay to the lender over the life of your mortgage. It's like the fee you pay for borrowing money.
How Do Interest Rates Affect You as a Buyer?
Interest rates directly impact two key aspects of your homebuying journey:
- Higher interest rates: Translate to higher monthly mortgage payments. This means you may qualify for a smaller loan amount, potentially limiting your home search options.
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