The most popular type of loan is the 30-year fixed-rate mortgage. By choosing the 30-year option, you are extending out your home loan as far as possible and you have the lowest payments possible each month. If you have a 30-year-fixed mortgage, you still have the option to make additional payments and payoff your home loan early with no penalties on the majority of loans.
You can calculate out how much you would have to pay on the loan to payoff your mortgage sooner, all while keeping the benefit of the lower payment. Then, if an emergency arose, you wouldn’t be obligated to the higher payment of the 15-year-fixed loan. That’s right, you can still payoff the loan in 15 years if you wanted, while having the flexibility of a smaller payment. The interest rate on a 15-year loan isn’t generally much lower and you would be committed to a larger payment.
Another thing you may want to consider, is if you have a loan that is assumable, it is easier to get someone to take over your payment when its amortized over 30 years, versus getting someone to commit to a 15-year loan. The lower the payments, the easier it would be to get someone qualified to assume the loan -freeing you up for something else.
All of these factors add up to make the 30-year fixed-rate mortage the most popular. With a commitment to a small payment, options for you to pay it the loan down faster and the abililty to reduce the amount of interest that you will pay over the term of the loan, 30-year fixed-rate mortgages are by far the most popular loan.
If you have any questions about your mortgage needs, please contact Creekside Mortgage, Inc. at 360.571.LOAN (5626).