If you’re thinking about refinancing your home loan or qualifying for a mortgage, you may by weighing the pros and cons of using a 15- or a 30-year fixed-rate mortgage. Both come with certain perks, but according to Kiplinger, you should assess your own personal financial situation to determine which is best for you.
You can save a lot of money on interest payments alone by choosing a 15-year FRM, says Kiplinger. However, this mortgage often comes with higher monthly payments. While you may be saving a significant amount of money long-term, you have to determine if you’ll be able to comfortably meet the higher cost every month without missing a payment.
Meanwhile, a 30-year FRM offer a bit more flexibility. Current rates for this mortgage have been hovering near historic lows for consecutive months, and according to Kiplinger, it’s unlikely that you’ll ever see them this low again.
Additionally, a 30-year mortgage can offer more more available tax breaks than it’s counterpart, says the source. If you’re planning on staying in your home for an extended period of time, this loan might be the right one for you.
Getting your personal finances under control is the first step to qualifying for a home loan. Freedom Mortgage offers some of the latest advice on comprehending a fluid housing market from improving your home value to tips on comparing mortgage loan rates.
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