Buying a home is one of the most important financial decisions of your life. Knowing and understanding which home mortgage loan type to choose is critical.
The first step is choosing the right type of loan. Fixed-rate and adjustable-rate mortgages are most common, but there are also Veteran Affairs, Federal
Housing Administration, balloon, interest-only and reverse mortgages. Thus, the best choice will depend on your financial position, the state of the economy
and your willingness to take a risk.
There are several questions you should ask yourself when deciding on a loan:
- How long to do plan to live in the home?
- Are you willing to take financial risks?
- Are there restrictions associated with the loan options?
- Are there any penalties you will incur?
30 Year vs. 15 Year Mortgage
Here's quick rundown of the mortgage options you are most likely to encounter:
30 Year Fixed Rate Mortgage
- Helps you purchase a more expensive home that meets the families real needs, and allows you to pay for it over time
- Has an increased tax deduction because you're paying more annual interest
- Provides flexibility for families with fluctuating monthly income by allowing them to pay more or less based on their monthly cash-flow
15 Year Fixed Rate Mortgage
- Homeowners are able to pay off their home faster while also earning equity faster, which helps support their overall financial plan
- Homeowners will be able to save interest which adds up significantly over 30 years
- A 15 year mortgage allow families to align their mortgage with significant life events such as retirement or a college education
Ready to Get Started?
Learn more about other types of loans or get started with the loan application by visiting our Home Loan Resource on on website.