Is there any reason why over a 30 year mortgage a bank has to make $260,000?
My mortgage for example I bought a house for $133,000 4 years ago. i still owe them $124,000 but i've paid them almost $45,000.
and I only have a 5.75% interest rate.
2007-05-29 09:44:44 · 4 answers · asked by Drew W 2 in Business & Finance ➔ Renting & Real Estate
They make that large amount of money because they lent you a lot of money for a very long time.
If you don't like it, pay it off. Or save for 50 years and buy the home in cash.
Probably can't do either, right? Then you have to pay to borrow money.
2007-05-29 09:48:15 · answer #1 · answered by Yanswersmonitorsarenazis 5 · 4⤊ 0⤋
Because the bank also has to pay someone or someplace for the use of the money they are lending to YOU. The bank doesn't make all of that interest. They pay some of it in turn to others who provide the funds to them.
2007-05-29 10:52:44 · answer #2 · answered by acermill 7 · 2⤊ 0⤋
that's how bank make $$$. they do need to pay interest to their customers' saving and money market account u know. where do u think they gonna get those money from?
plus the mortgage interests are tax deductibles.
2007-05-29 09:55:17 · answer #3 · answered by seafood10 3 · 0⤊ 0⤋
although its unethical they legally bind you once u sign the dotted line. that interest rate is pretty avergae so your not getting ripped off, now credit cards charging 28% interest rate seems like a rip off.
2007-05-29 09:58:10 · answer #4 · answered by spadezgurl22 6 · 0⤊ 1⤋