You hear these two words all the time - but if you are a new home buyer - do you really understand what they mean?
Essentially - it’s the amount of additional money you have to pay a bank, mortgage company, credit union, etc. for the amount you borrowed from them; and it’s also the amount of money you earn for allowing a bank, credit union or other financial company to hold your money for you.
The interest rate is a fraction of the base number and it is calculated over a year – which is why it is referred to as an annual percentage rate.
There are short-term and long-term interest rates and they are generally determined by the United States Government Treasury Bonds (you may have heard them referred to as T-Bills). The department of Treasury is divided into two areas - one that collects money (the I.R.S.) and one that pays the bills.
At the end of the day - when both departments reconcile their accounting sheets the debt that is owed is sold in the form of securities (a financial document ensuring-repayment) to domestic and foreign investors. These securities include treasury bonds - and the interest rates are adjusted and set based on the amount of debt owed.
How does this affect you? Interest Rates have a huge impact on your financial future, your financial freedom or wealth, your retirement plans and your children’s future inheritance.
Keep yourself informed and educate yourself on how the government is managing our budget. Once you become more knowledgeable - it will give you a better idea of when to make a major purchase decision, buy stocks, investments or annuities or sell what you have.
Find out more about
Texas Housing Market. Know your market as your begin to
look for homes in Texas.
More important - you can exercise your right to vote.
