Mortgage Advisors

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15 vs. 30 Year Mortgages

15-Year Mortgage Term:

15-year mortgage terms can mean a lower overall expense because, in the end, you will have paid much less in total interest, and your interest rate will be lower. Other advantages are that you can build equity faster and have debt for only fifteen years, rather than thirty years. However, you should also consider the disadvantages of a fifteen year mortgage term. First, you will have to qualify for the higher monthly payment. You will have the burden of a higher monthly payment throughout the life of the loan, which means having less money for other expenses. The fifteen year mortgage will also mean that less money will go toward tax deductions.

30-Year Mortgage Term:

Thirty year mortgage terms are easier to qualify for, and your monthly mortgage payments will be lower. This means more money for other expenses, and more money is going toward tax deductions. Thirty year mortgages, however, have their drawbacks, as well. The most significant disadvantage is that your overall mortgage cost will be substantially higher, and you will pay more in interest. You will have debt for thirty years and a higher interest rate.