Is it correct for a mortgage to be more than twice the cost of a home?
According to this mortgage calculator it is. Just bear with me on these simple and straight forward numbers. Lets assume you are taking out a loan for $ 300,000 for 30 years with a fixed rate of 6.5%. According to http://www.mortgagecalculator.org/ that would equal a monthly payment of $ 2,333.70 and a total loan cost of $ 840,133.47. This is almost THREE times the original loan amount. I understand interest…..but DAAAMN!!! That’s like buying a $ 300 TV through Rent-A-Center and paying $ 900 for it in the end, NO ONE in there right mind would do that…..yet its ok to do it for a home? Am I missing something or does everyone end up paying at least double the cost of their house. I understand there are other details and variables and such but in all honesty they dont make that much of a difference. For example, if you put down a $ 50,000 down payment and only borrowed $ 250,000 then you still end up paying over $ 700,000 which is more than twice the cost of the loan.