While thirty years seems like a long time, a 30 year mortgage is actually considered a typical mortgage in length. It does carry more risk than a fifteen year mortgage, but this is relative to longterm mortgages which may be stretched out as far as 40 or 50 years. Ideally, nobody wants to wait for a house or to pay off a debt, certainly not three decades worth of bill paying. If you could, you would want to settle all of your debts as soon as possible. However, the price of a home can be very expensive and sometimes consumers will be forced to wait, as that much money simply has to be paid over a longer period of time.

The Pros And Cons Of A 30 Year Wait

Consumers are still given a choice when it comes to choosing short term or long term mortgages, provided their credit is clean. When you are shopping for a mortgage and thinking frugally, then you have to consider the interest rate. The interest rate will directly affect your monthly payment, regardless of whether you have a fixed rate plan or adjustable mortgage plan. While the obvious logic is to seek a low interest rate which equals lower monthly payments, you have to consider all aspects of a program. Over the period of thirty years, will the total amount of interest paid be reasonable or will it be astronomical? This is especially important if you have an adjustable mortgage rate, which changes according to indices and may even include a margin percentage beyond the rate. In most every scenario, a thirty year plan will cost significantly less on a month-to-month basis than a 15 year plan. This saves you money in the short term and you may be relieved, even surprised at how affordable the plan is. Thirty year plans are also easier to qualify for than short term plans which require a higher monthly payment and more demanding qualifying factors.

Some borrowers may choose a 30 year mortgage to build equity in a property. They may have it all planned out to make low monthly payments on the property as they renovate it, and then lease or rent it to others. Using rent money they can pay down the principal balance quickly. After a while, they build up substantial equity and then have the ability to take our further loans using the property as collateral. A 30 year mortgage is attractive to investors who have a plan, as well as younger consumers who want to start a family and desire to keep the monthly payments as low as possible. Ideally, you can use a thirty-year mortgage to your

• 1
• 2
• next page >>

---

Add your voice

Know something about Mortgages: 15 year versus 30 year mortgages?
We want to hear your view. Write now!