Choosing a Mortgage Length: Things to Consider
If you are financing a house purchase with a mortgage, one of the biggest decisions you need to make is choosing between a 15- and a 30-year mortgage. Surveys suggest that most of the loan applicants go with the longer term.
Both mortgage terms have their pros and cons. A 15-year mortgage has higher monthly payments, but a smaller overall mortgage value.
Mortgage companies in Salt Lake City such as
Altius Mortgage Group share some of the things you need to consider when deciding between these two terms:
If you, however, will need to stretch your budget a lot further, the longer term is the better choice.
- Your age and income stability. If you can afford a higher mortgage payment with the salary you are getting, you still need to consider what can happen if you lose your job. Could you still make the payments?
- Savings. Assess how large your emergency fund is. If you do not have good savings, a 30-year loan is a great option for growing your account. If you are struggling to pay for all your financial commitments, a longer mortgage term can somehow offer relief.
Note that your mortgage payment should not take most of your income; you still need to have savings.
- Tax benefits. With a 30-year mortgage, you will be paying more interests, which mean it can give you the most tax breaks. Your decision, however, should not be solely relied on this benefit. You also need to consider the advantages and the long-term benefits of a 15-year mortgage.
If you are still undecided, it is best to talk reliable lender. You should also consider eligibility (or qualifications) for a mortgage, as well as your long-term goals. A pre-qualification can give you an idea of how much money you may be able to borrow.
