What is a 30 Year Fixed Mortgage?
The traditional 30-year fixed-rate mortgage loan has an unchangeable interest rate and monthly payment. That means that every month your payment stays the same and you don’t have to worry about not being able to afford it anymore because the market rates went up. It stays constant. A 30-year home loan may be a good option for you, but it all depends on your home needs.
This loan type is the most common in the US today. It offers a lower monthly payment than 15-year fixed mortgage and you’ll own your home after 360 monthly payments. The good news is that you can always make extra payments to your Bank and pay the balance off sooner. Many buyers opt in putting a little extra towards the principal from time to time and in the long run, save big on that built-up interest and write a final check at year 15, 17, 20.. You have the flexibility to do so whenever you need.
We’re here to make your home loan process easy. With our knowledge and experience, we will help and guide you along the way to getting approved.
We will show you the difference between loan programs so you can choose the right one for you whether you are a first-time home buyer or a professional real estate investor.
Our goal is ~always~ to help you get a home mortgage.
30 Year Fixed Mortgage Benefits
1. Lower monthly payment
A 30-year fixed-rate mortgage loan allows for a more affordable monthly payment by stretching out the repayment of the home loan over a longer period of time.
2. Easier to qualify for
With smaller payments, more borrowers are eligible and qualify for a 30-year mortgage.
3. You can afford a bigger/better house
Lower payments mean you could qualify for a more expensive home/ better neighborhood/ extra features like a pool/closeness to the water.
3. Flexibility in payments
You can pay off the loan faster by making extra payments (no restrictions), but you can also always fall back on just making the set payment if needed.
4. Predictable mortgage future
It’s great to be able to count on your mortgage payment staying the same, no matter how stormy the economy gets or how high the interest rates rise
5. Bigger tax deduction
Tax laws let home buyers deduct mortgage interest from their taxes. In the early years of a loan, most of your mortgage payments go towards interest, which makes your tax deduction very attractive.
30 Year Fixed Mortgage Drawbacks
1. Your rate will be a bit higher than 15-year fixed
Lenders’ risk of not getting repaid is spread over a longer time, they tend to charge higher interest rates for that.
2. You might overborrow
Qualifying for a bigger mortgage can tempt some people to get a bigger, better home that’s harder to afford.
Always remember to leave a cushion for life’s inevitable surprises.
3. More interest is paid to the Bank
Paying interest for 30 years adds up to a much higher total interest paid compared to a 15-year loan