When it comes to taking out a mortgage to purchase your dream home, one of the most important considerations to mull over is the length of your mortgage. In most cases, you will choose between a 15 or 30 year mortgage. Discussing your options with a trusted exclusive buyer’s agent, such as one from T.J. Lamb Real Estate, may be a good idea.
Contrary to what you may initially think, both lengths have a distinct set of advantages. It all depends on how long you prefer to be tied up to that home, as well as other financial considerations. With that in mind, here are some of the advantages and disadvantages associated with the 15 or 30 year mortgage:
The 30-year mortgage is what many people are most familiar with. Numerous generations have been able to acquire a home for sale thanks to this mortgage.
Due to the length of a 30-year mortgage, people who take on this type of loan often enjoy lower monthly payments. This allows you to invest more money in other ways to help you build your wealth. A 30-year mortgage is often an attractive option for those who plan to maximize their retirement account or save up for their child’s college tuition.
Many people believe that taking out a 15-year mortgage sets them back financially due to higher monthly payments. There is a kernel of truth to that assumption, but it isn’t entirely true.
When you compute your monthly interest on a 15-year mortgage, you actually pay less interest over the lifetime of the loan as compared to a 30-year mortgage. On the other hand, banks tend to see 15-year mortgages as a lower risk, which can help you enjoy even lower interest rates.
Whichever option you choose, 15 or 30 year mortgage, be sure to base it on your current financial situation, your tolerance for debt, and your ability to meet your other financial goals. After all, the last thing you want to have happen is to lose your dream house just because you couldn’t pay your mortgage.
You can find more articles pertaining to the Overland Park KS mortgage market, including more tips on 15 or 30 year mortgage advice in the Overland Park KS Mortgage Info section of our site below Overland Park KS Real Estate Categories in the column to your right.