2. You get to choose: 30-year, or even shorter-term mortgages.
Again, most mortgage brokers will simply assume you want a 30-year home loan. For that matter, most of your relatives will assume it. Somewhere in the back of your head, you already probably assume it. “Houses take thirty years to pay off” is one of those things everyone just knows about mortgages, sort of like how cars are always financed for 60 months.
But you have a choice. There are mortgage loans available that allow you to have your house paid off in 15 years, instead of the usual 30. A lot of people are surprised to find that a 15 year home loan can still be quite affordable. No, it doesn’t necessarily mean you have to double your payment either (remember, a large part of your home loan payment goes to interest).
And a 15-year loan is often a lot smarter for someone than a 30-year loan. For one thing, you can pay the loan off and truly own your home a lot sooner (maybe before your kids have moved out on their own, instead of when you have grandchildren). For another, you save by paying less overall in interest.
Of course, for a lot of people a 30-year mortgage still makes the most financial sense. I help my customers choose intelligently between their options, instead of simply assuming they want to go one way or the other.
Continue on to Three Things You Probably Didn’t Suspect About Mortgages: Number 3
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