04-03-2009, 02:57 PM
Don't want to burst your bubble, but one should look at what one will pay over the entire life of the loan, rather than the advertised interest rate and the monthly payment. One can get a low monthly payment merely by agreeing to pay over a longer term (for example there are 40 and 50 year mortgages out there!). It is far more important to get out of debt as quickly as possible which saves thousands of dollars in interest. Also, be aware that institutions calculate interest in many different ways which can make it appear that one is getting a better deal with a lower rate, when paying a higher rate may actually be a better deal. The consumer has been trained to ask first, "What is the interest rate?" and then "What is my monthly payment?", rather than asking a better question, "How much will I pay in total to retire this mortgage?".
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