Name: Mortgage Rates: What the Banks AREN'T Telling You
Uploaded: 2020-03-05T05:40:23.000Z
Duration: 11 min 24 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Future simple

hey what's up you guys in this video we're gonna go and expose what the banks

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aren't telling you about getting a new loan or a mortgage and we're gonna go

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and talk about the truth of mortgage rates hey what's going on everyone this

is Sam Kwak one of the Kwak Brothers real estate investor and entrepreneur

and this video we're gonna go and expose some truth about the things that the

banks aren't telling you as well as mortgage rates how they can be dangerous

if you don't know this one concept now before I dive right in and be sure to

hit the subscribe button as well as the dul notification funds to get you

getting notified for our future videos let's go and dive right into your

mortgage rate now chances are you might be looking to buy a new house or you're

looking to refinance because your mortgage broker or your banker may say

well hey mister missus borrow we got a cheaper rate for you I can save you

money come back in we'll go and refinance your loan well before we do

that before you say yes I want you guys to pay attention to what the banks

aren't telling you and I'm gonna go and share what that is so first of all let's

go and talk about the mortgage rate and a lot of times when you go and refinance

or get a new loan when purchasing a new house your interest rate is gonna be

anywhere between three to five percent interest now some of you guys may have

less you know because your credit score is amazing or you have good financials

but a lot of times I look at interest rates they're gonna be anywhere between

3% to 5% interest depending on your credit score and varying financial

factors now three to five percent interest rate may not seem that

dangerous room may seem very small and you're like hey you know three to five

percent interest rate doesn't seem like a whole lot and you know you may argue

and say you know Sam three to five percent interest rate the interest rate

that we were seeing right now historically is very very low it's true

if you go back and look at 1980s and 1970s interest rates they were as high

as 18 percent 17% interest rate which is which is crazy right but we look at

three to five percent interest rate and I'm gonna tell you guys why this is

equally dangerous as 17 percent or 18 inch 18% interest rate because of the

Amma's a Shimin period and this is what the banks don't really talk about is the

amortization period a lot of people go in and assume that they're gonna get

a 30-year amortized loan and vast majority Americans today get a 30-year

amortized loan and I'm gonna show you guys why the 30-year amortization loan

plus the three to five percent interest rate really doesn't mix well together

especially if you're gonna save money on interest so let's look at the three

percent scenario let's say you did go down the bank and got a three percent

interest loan okay on let's say a $250,000 loan okay 20 $50,000 loan three

percent interest rate and 30-year amortization now I know some of you guys

may have more than $200,000 of loan that you need to go get or you can have less

right I'm just putting out what's average in terms of the nationwide

numbers so if you look at a 3 percent interest rate interest rate on a $50,000

loan I'm gonna go and put this on the screen notice not the interest rate but

I want you guys to pay attention to the accrued interest that you have to pay by

the end of 30 years you can see that you're paying a fairly large chunk of

money in terms of interest so that 3% interest loan came it may have seen

innocent right it may seem like it's not gonna hurt anybody but you can see here

already there you're gonna end up paying a good chunk of money for the interest

whenever you guys go and talk to a banker or a mortgage lender I want you

guys to pay attention to what is the accrued interest amount that's something

that the bankers are not gonna want to talk about because as soon as you as

soon as they know that you know what the interest amount is going to be do you

know you're gonna freak out so they don't want you to pay attention to the

crude interest amount they only want you to talk about or at least look at the

interest rate because they know just by looking at that 3% interest rate you're

like that's not too bad I'm just gonna go for this anyways now let's say worst

case scenario you get a 5% interest rate or greater and I'm gonna talk about 5%

interest rate because there's there's a significance with that 5% interest rate

loan so let's say you n at un and got a 5% interest loan on the same figure

$250,000 okay for 30-year amortization I'm gonna put this on the screen you'll

notice that you'll you're gonna actually pay close to the double the amount that

you initially borrow through the bank meaning if you borrow 2 or $50,000 at 5

percent interest for 30-year amortization you're gonna go and pay

close to two hundred two hundred fifty thousand dollars just in interest alone

which means your total payment is gonna come close to five hundred thousand

dollars so what you just did is you bought yourself a house and you also

bought your bank another house that's an equal value or close to the equal value

a lot of people when they don't pay attention to the accrued interest amount

they just go for the five percent interest rate because they think well

this is historically low it's not too bad I'm just gonna go in and pull the

trigger but I want you guys to pay attention to what is the accrued

interest amount again it's not necessarily about two interest rate it's

about how much you're actually gonna pay by the time you're done paying off the

loan so I know some some of you guys looking at this like oh my gosh like

that that 5% interest loan it's not as innocent that I it's not as innocent as

I previously thought right gives you as a second sort of

consideration as to why getting a 30-year mortgage or 30-year amortized

loan may not be the best idea the next thing that the banks don't really talk

about is the amortization chart this is what's called an amortization chart and

on the bottom you got time and we're gonna express this in ears 30 years and

this is zero and on top this the the vertical line is the amount of monthly

payment every month on that mortgage so let's assume that your mortgage payment

is about you know let's say thousand dollars I know some of you guys pay more

so you guys pay less and I'm gonna change the color up here okay all right

this line here I'm gonna draw a little bit better of a curve there you go this

line right here represents the interest so red is interest and going to change

my color again this blue line represents principal now principal is what we

actually want to pay off that's the actual loan amount that we're seeking to

pay off to build equity to build wealth on your home now you can see here ride

around here okay at this point you're picking up more equity right you're

picking up more you're paying off more of your your

balance now what I want you guys to pay attention is this portion right here

okay you notice that you're paying very little in principle towards the

beginning part of your mortgage lifecycle and vast majority of what

you're actually paying in the beginning is the interest so I don't have thousand

dollars and this I'm just giving you an illustration this may not be accurate

out of the thousand dollars about eight hundred dollars initially is gonna go

towards interest and about two hundred dollars is gonna go towards principal

and this is on a 30-year amortized loan so what that basically means is that

towards the earlier part of your mortgage the bank's are profiting off of

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Mortgage Rates: What the Banks AREN'T Telling You

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