Tim Mooney, Vice President | Mortgage Loan Officer
The 30-year fixed rate mortgage is the path that generations of Americans have taken to first-time homeownership for years. But many of those buyers might have been better served if they had opted instead for a 15-year fixed-rate mortgage.
There are many decisions to be made when getting a mortgage. Possibly the biggest and most crucial one is choosing the life of your loan. Knowing the differences between the two can help you decide which plan would be best for you.
So, what are the differences? The loans are structurally similar—the main difference is the term. Below are benefits for each term:
Benefits of a 15-year mortgage
- Lower rates
- Build equity in your home faster.
- Pay less interest over the term of the loan.
Benefits of a 30-year mortgage
- Lower payments
- Flexibility of paying more than the minimum payment if you choose too.
- Helps with managing the household budget in other areas like clothes, food, utilities, education, etc.
- Allows for more options in finding that perfect home.
Taking out a mortgage will probably be the largest purchase you ever make. No matter how much advice you get from friends and research, only you can make the final decision. The good news is you don’t have to figure it all out for yourself. Contact Arcola First Bank’s mortgage loan experts to help you select the best option for your financial situation.