One of the biggest questions you will face when you are deciding on financing to purchase your home is the length of time you will choose. The amount of time on your home loan will have a lot of implications financially and can change the way you live from month to month. For example, a 15 year and a 30 year mortgage will each have its own set of unique advantages for you to evaluate. Buying a home can be a great investment that brings your years of joy and happiness, but only if you get your financing taken care of the right way. Remember that you can always reach out to All American Financial Services if you are looking for home financing. Below, we will be discussing whether or not you should go for a 15 year or a 30 year mortgage for your home purchase.
Whenever you are evaluating a major financial decision, the first thing you should do is take a detailed look at your own financial situation. That way, you will know exactly what you can afford before you apply for a home loan. Think about things like your monthly income, what debts and bills you have to take care of each month, how much money you have saved up, and what your overall credit score is. Creating a detailed budget after you figure out what all of those number are is the best way to decide on either a 15 year or 30 year mortgage.
The truth is that 30 year mortgages are the most common. It’s a time frame for a home loan that allows you to keep your monthly mortgage payments lower, which is extremely helpful for people who are pressed for cash each month due to bills and debts. A 30 year mortgage is a great option if you plan to be living and raising a family in your home for many years to come. It’s also a great option for young families, thanks to those lower monthly payments. Since the monthly payments on your loan will be lower, you can focus on paying off other debts like student loans and build up your personal savings as well.
A 15 year mortgage is another option to consider when you are buying a home. If you understand how mortgages and interest works you know that a shorter timeframe on your mortgage means you will be paying less interest. This can be a good option if you are someone that is closer to retirement, as you can get your mortgage paid off prior to your retirement. You also will be building equity in your home a lot faster with a 15 year mortgage. These are certainly big advantages to consider, but keep in mind that your monthly payments will be costlier with a 15 year mortgage.
We hope this article has given you some great insight into whether a 30 year or 15 year mortgage is the right choice for you. Connect with All American Financial Services today to hear about all of our home loan options.