The conventional 30-year mortgage is a renowned and affordable mortgage in the U.S. Most home buyers in the U.S. go for this option. However, VA lenders also provide a 15-year mortgage. These loans offer lower rates, but the payment is higher because the total loan is paid in just 15 years. Which one is right for you? A 30 year mortgage may seem like to way to go because the mortgage payments will be lower. It also may help you to create a budget and avoid financial constraints in the short term. This type of loan helps you buy a more expensive home.
Which One to Choose – 15 Year vs. 30 Year Mortgage?
The advantages and disadvantages of any loan depends on the borrower’s goals. The biggest advantage of the 30-year mortgage is lower monthly payments. The chief disadvantage is paying more interest on the loan.
The 15-year loan requires much higher monthly payments. However, lifetime’s savings are substantial. The 30-year loan would cost around three times more than the 15-year mortgage. On the flip side, the 30-year mortgage’s lower payments would help you save more money to meet other goals. That’s why the 30-year mortgage is so popular.
Therefore, someone suited for a shorter-term mortgage is someone who continuously paid on a 30-year mortgage for a while and intends to refinance to lower the interest rate. A shorter-term mortgage also suites people who are close to retirement and intend to pay off their debts beforehand. Also, this suites those who make a large down payment. The disadvantage is that the higher payments linked with shorter-term mortgages may push you to buy a smaller house. If you move to a 15-year mortgage, you would be disqualified because the higher monthly payments will increase your debt-to-income ratio. Those who want sufficient disposable income to save for major life events are suitable for longer-term mortgages.
Read About : How to Pay Off Your Mortgage Early
Start by defining your goals to select the mortgage that’s best for you. Generally, people want a 30-year mortgage when they want to live in a house with their family and a comfortable monthly payment. All you have to do is get a 30-year mortgage and look at it like a 15-year mortgage to build equity and get free from debt faster. This ensures that you budget for the closing costs and fees associated with the loan you want.
On the whole, when deciding on a loan and a mortgage lender in MA, consider offers at various financial institutions. You might get shorter and longer term mortgages apart from 30- and 15-year mortgages.
Drew Mortgage Associates is a mortgage company in MA that offers professional home loan services. Drew Mortgage Associates can help you with an Affordable Refinance Program at a low-interest rate or reduced term. Find mortgage lenders in MA for mortgage lenders services. You can also find the most experienced and ethical Boston mortgage lenders offering you the best service and fees.