How Will a 30 Year Fixed Mortgage Benefit You?
A 30 year fixed mortgage can offer a number of benefits with the least amount of hassle. Some of the benefits that you can expect is a long repayment term and easy repayment options. So you have been eagerly looking to buy a home for months and at last you"ve found the home that"s simply perfect for you.
Now all you have to do is to buy your new home and get settled in with your family, right? Not quite. There"s a few more important things you need to consider. The first thing you need is to get preapproval on a loan so you can know how much house you can afford to purchase.
You will have to do some homework and decide which type of mortgage and payment terms will fit within your budget. You will find the following information valuable as it will be essential in assisting you with making the loan decision that will fit your budget as well as financial situation.
Selection of the right mortgage is important because the amount of money you will pay will be based on it. If you are looking for the consistency and predictability of a set rate for the life of your loan, then a fixed rate mortgage would be appropriate for you.
Generally mortgages that offer a longer term such as a 30 year fixed mortgage need to pay higher rates of interest as the life span of the loan is longer. However a longer term would mean your monthly mortgage payments will be less than they would be with a similar shorter term mortgage such as a 15 year fixed rate.
What is a difference between 30 year and 15 year fixed rate mortgage?
A 30 year mortgage will offer lower monthly payments at a higher rate of interest as compared to a 15 year mortgage. You"ll have a smaller monthly responsibility but in the long run you"ll pay more for your home since you"re paying it off with interest for an extended period of time. Another major benefit with lower monthly payments is that you will be able to get approved for the loan easier and also be able to purchase more house.
A 15-year fixed mortgage on the other hand will carry a higher monthly payment but a lower rate of interest so you"ll pay less for your home as you"re paying it off in a shorter period of time.
Summarizing 30 Year Fixed Mortgage Benefits:
- Affordable to make payments according to your budget.
- Easier to Get Approval
- More purchasing power to buy more house.
Quick Response and streamlined processing – The process of approval should be quick and simple. A lot of home buyers who have outstanding credit history can be accepted for a mortgage at the instance of the application and no or very little paperwork is required to carry on. They are also known as hassle free mortgages as 80% less paperwork is required as compared to other loan programs.
It is better to use a proprietary procedure to decide if you qualify for this modernized type of loan. This signifies less digging, no disapproval and least collection of paperwork on your part. Buying a new home is a big investment and choosing the right mortgage for you can be a bit intimidating but doing your research an familiarizing yourself with the loan process can save you lots of time and money in the future.
You may need a large amount of money to fulfill your dreams of owning a home. Before applying for a particular loan and selecting the right lender, it is better to read over the terms and conditions carefully. Being prepared will help you make better more educated decisions that you won’t regret down the road because you were stuck with the wrong loan.