Which Is Better: A 30-Year Or A 15-Year Mortgage?



There are a variety of mortgages are available in the market but most American homebuyers mostly choose between a 15-year or a 30-year mortgage. 90% of them chose the latter according to Freddie Mac in 2017.

But do you really understand the difference between the two? Which one really is much better for you? Read on to find out...

30-Year Mortgage

1. The advantage of a 30-year mortgage is getting a lower monthly payment while getting a much higher interest and total payments.

2. It is much easier to get approved for a mortgage and most homebuyers qualify for this one.

3. It makes it easier to fund your savings goal - whether for another investment or retirement because you'll have more free money in your budget to put for long term goals.

4. You'll have a little more security for paying lower monthly mortgage in case of life's surprises like losing or changing jobs.

15-Year Mortgage

1. The advantage of a 15-year mortgage is you will be in debt half the time and you'll pay off your loan faster.

2. You can save thousands of dollars in total for having a much lower interest rate but with a much higher monthly payment.

3. It will be easier to refinance with lower loan-to-value ratio.

4. In cases that you find you need to sell your home, you're less likely to be underwater.

Both have their own pros and cons, a 15-year may be too overwhelming to some or in the same way 30-year maybe too long for others. It really depends on your situation and the goals you have in mind. Be sure to get some help with the experts to weigh down and choose the best for you.

Comments

Post a Comment

Popular posts from this blog

Alaska Real Estate Market Update as of December 8th to December 14th 2018

Image
Here's Alaska real estate market update as of December 8th to December 14th 2018. Still, on the top of our list is the  Anchorage market . During this week, 489 are currently active listings where 11 of which are new listings. 22 listings were pended and 36 were sold. Next is  Wasilla market , 369 are active where 22 are of which are new, 19 pended and 16 were sold. Compared to the  previous market update , you can see that there are less active and pended then more sold listings in Anchorage while more pended and same were sold listings in Wasilla for the week. See full report: If you want to know more on the latest real estate market update and is interested in buying or selling, give me a call (907) 570-6757 or 907-720-4663.
Read more

Before You Renovate or Buy a New Home, Read This Post

Image
Most people at some point reach a real estate crossroad whether to renovate your existing home or buy a new one that will fit your current and future needs. To answer the question, you'll have to think of many factors. This is not a one-size fit all answer but answering the following questions may help you make the decision. 1. What can you afford? Extensive and realistic budget planning is an essential factor to make your decision. You need to know the renovating vs. buying costs. Is it cheaper to buy than to renovate your home? Whether one is cheaper or not, will it fit your budget? And if you do have the budget, will it be worth it? 2. Will there be enough space? One of the common reason people need to move or renovate is the need for expansion. Will there be enough space for you to expand if you are going to renovate? How about adding a 2nd story? You need to know if the home's foundation can support additional weight or it will require reinforcement. Also, is
Read more

Pros and Cons of Co-Buying A Home

Image
From our previous blog, How Co-Buying Can Help You Become A Homeowner , we discussed well, as what the title says, how co buying can help you become a homeowner. With that being discussed, there are also pros and cons of doing so. Pros 1. It makes owning a home more affordable because you have someone to split the down payment with. 2. It can help you build equity earlier in life. 3. Help you share and save money on utilities and other maintenance expenses. 4. You have the option to predetermine how the asset will be divided in the event of a split. 5. Income pooling with your co buyer can help you shop in a higher price range than you can normally afford alone. Cons 1. The interest rate will be determined from whom who have the lowest credit score between the buyers. 2. If your co buyer can't make the share of the payment, the entire burden will fall on the other buyer. 3. If you chose TIC for the title, your co-owner can sell the ho
Read more