There are a lot of reasons why a 30-year mortgage can be just as good or even better than its 15-year counterpart. Depending on how efficiently you handle it, you’ll see that there are many ways you can take full advantage of a 30-year loan.
Buying a home may be one of the most significant achievements of adulthood, but it isn’t the only goal for a lot of people, including you.
The extra money that isn’t going to paying off your house can be used for other worthwhile investments such as pursuing higher education, setting up a business, or buying your very first car. If you’re someone who believes in working on multiple goals simultaneously, then a 30-year mortgage can aid you in achieving them more comfortably.
With careful planning and consultation with your lender, you can take advantage of the safety of a 30-year mortgage with one of the main benefits of a 15-year mortgage – which is claiming full ownership of your home quickly.
The great thing about 30-year mortgages is that no matter what happens, you can be sure that your interest rate stays the same for the full 30-year term unless you sell or refinance the home.
The lower monthly payments associated with a 30-year mortgage will allow you to buy more house than you could afford with a 15-year loan.
Because monthly payments for a 30-year loan are relatively low as compared to payments for 15-year loans, you’ll have a better chance at saving up for a rainy day.
15-year mortgages require monthly payments that are at least 50% higher than those of 30-year mortgages. On top of this, there are also property taxes and insurance to worry about — not to mention mortgage insurance premium for those who put less than a 20% down payment. With all of these on your plate, high monthly fees would make it difficult for you to build an emergency fund or even respond to emergencies and other unexpected expenses. This may leave you with no choice other than to sell, refinance, or foreclose.
