Mortgage Services

When shopping for a home mortgage, one of the big decisions you must make is deciding if you want to go with a 30 year mortgage or a 15 year mortgage. A mortgage lender can help you with this very important decision by finding out some information about your financial situation, how long you plan to stay in a house, and what your goals are concerning a house and mortgage.

Interest Rates

A mortgage lender is going to want to know your financial situation. He wants to make sure that if he lends you money, he can be reasonably certain that you will be able to pay it back. This is where the length of the loan comes into play. First off, a 30 year mortgage interest rate typically will be lower than a 15 year mortgage rate. If you take payments out to the end of the loan however, you will end up paying a lot more interest with a 30 year loan just by virtue of amortization. Shop carefully for low mortgage interest rates to minimize your total interest payment. Secondly, a 30 year mortgage will have lower monthly payments than a 15 year mortgage, just because the payments are spread out over a longer period of time.

Is a 30 Year Mortgage Right For You?

So the mortgage lenders next question is, how long do you plan to stay in the house? If you don't plan on being there for a long period of time, a 30 year mortgage may be a better bet. The lower monthly payments associated with a 30 year note allow you to have more money each month for other things or investments. If however, you plan to stay for the long haul, a 15 year note may be a better choice as you will build more equity faster, and obviously you'll own your home sooner.

So take a look at your financial situation. Do you require more discretionary income each month? or do you have enough to pay higher 15 year payments. How long do you plan on staying? is the house just a stopgap while you save for your dream home? or are you there to stay? Do you want to build up fast equity in your house, and pay the house off sooner? or do you like the cushion of an extra chunk of money each month. These are all questions to think about when shopping for a mortgage. A mortgage lender can help you with some of them, and you have to decide what type of loan, a 30 year or 15 year would work out best for you.

Mortgage Services |