Mortgage - Home Mortgage

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Average Home Mortgage

The home is most expensive purchase that the average American will make in his or her lifetime. Most Americans will have to take out a mortgage to buy the average home because the average home costs around $200,000.

The average home mortgage in the United States now costs $225,000. It’ll be paid off in 360 payments of $1780 in 30 years time. The payments cover both the interest and principal of the mortgage.

This means that the average mortgage is a 30 year mortgage meaning that it is designed to take 30 years to pay off. Some people will elect for mortgages that will be paid off in a shorter period of time such as ten or twenty years.

What Average Means

It must be remembered that this is an average figure that covers the entire United States which is a huge country. In some parts of the nation the cost of homes and the cost of a mortgage will be far lower than the average. For example, media reports indicate that some homes in cities like Detroit and Cleveland are selling for prices under $20,000.

In other regions of the country, mortgage and home prices are quite a bit higher than average. In Denver, Colorado, the average home costs around $300,000. In Los Angeles an average home can cost as much as a half a million dollars.

There are also variations within regions or cities. Homes in country clubs and wealthier suburbs can cost several hundred thousand dollars while houses just a few miles away in a poorer neighborhood can cost less than $50,000.

Some Other Variations

Since the price of houses varies in different areas so does the cost of getting a mortgage. There maybe higher interest rates in some areas and lower interest rates in other regions. Banks may charge more interest on mortgages in poorer neighborhoods where foreclosure is more common.

Some lenders may also require larger down payments in certain places. There can be other differences in terms, for example lenders may not make 30 year mortgages available in all areas.

Mortgage Differences

There are many people who won’t be able to get the average mortgage with the average interest rate. For example, those with poor credit scores may have to pay higher interest rates and agree to stricter terms. Persons who are willing to make a bigger down payment might also get a better interest rate or terms.

Lenders will not make normal mortgages available to persons who want to take out mortgages on certain kinds of home. Many lenders won’t issue mortgages on mobile homes or condos for example. Other lenders will mortgage those homes but will require different terms and interest rates on such structures.

There is no such thing as the average mortgage because of the wide variations in the mortgage industry and housing.