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Old 04-29-2020, 12:39 AM   #14 (permalink)
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Originally Posted by Xist View Post
They are currently asking $189,000, but things weren't selling well before TPgate.

Are you ready for some numbers?

There are probably dozens of banks that issue VA loans, but I doubt this one would qualify. Navy Federal says "Interest rate as low as 2.875%."

First, that is for a 15-year loan. It is a whopping 3% for a 30-year loan. They say that monthly payments would be $796.83 with a 3% morgtage.
There is a lot more difference between the cost of the loans than the extra 0.125% APR would make it seem.

A $189,000 home financed for 15 years at 2.875% will cost you $232,934. ($189,000 purchase price + $43,934 in interest)

A $189,000 home financed for 30 years at 3.00 will cost you $287,044 ($189,000 purchase price + $98,044 in interest)

15 year loans save a bunch of money but they can be hard for lots of people to fit into their budgets.

We bought our 1st house on a 30 year FHA loan with 3% down. Sold it 6 years later without much of the principal paid off. 2nd house was 15% down on a 30 year loan. We paid on schedule for 18 months while we paid off the rest of our debt and then starting making payments to pay it off 20 years early. Sold that house and bought our current house with 25% down on a 15 year loan. We haven't decided if we should pay off our house or invest in a rental. Right now we are just sitting on the cash we saved for the rental down-payment because - COVID depression.
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