Loan Types

30-year vs 15-year mortgage refinance.
Depending on what your financial position is, there’s many factors that could make a 30-year or a 15-year mortgage an appropriate choice for you. Here are some factors to weigh when considering each.

15-year mortgage
Borrowers who decide to go with a 15-year mortgage can build equity much faster. Prompting a lower interest rate plus a higher payment amount lets homeowners build home equity so much faster because the principal is paid in a shorter amount of time. Providing the borrower to reap huge long-term savings. With more home equity borrowers shorten their path to full homeownership. This is the fastest way to be an outright homeowner. But every individual has different financial situations and responsibility’s they need to weigh before making this decision. 

30-year mortgage
This option is the most common for borrowers and for good reason. A 30-year mortgage allows borrowers to qualify for lower payments, which allows individuals access to more expensive homes. It’s also important to keep in mind that these offer more flexibility to the borrower. You can make more payment to the principle when able, while keeping the option to refer back to the smaller payments as needed.

These loans are eligible to be written off or deduct mortgage interest from a borrower’s taxes. The first years of loan payments generally go towards paying off the interest making for a hefty tax deduction. Though you’ll pay much more interest over the life span on the loan.

Adjustable-rate mortgage vs Fixed rate mortgage.
The main difference between these two is that for fixed rates, the borrower has the peace of mind knowing that whatever the rate is when you take the loan out will not change. An adjustable rate can have varying rates that may go up or down.

Adjustable-rate mortgages
often referred to as “ARM loans”. With these the interest rate on the mortgage is dependent on the interest rates of the marketplace. So, if the marketplace sees an increase in interest rates, you’ll see a raise in your mortgage rates. However, this is the same if rates start to fall.

Adjustable rates commonly have lower interest rates than fixed loans, helping the borrower pay more principal every month. Lenders even reward this option by offering lower initial rates due to the risk. Plus, If rates increase you can simply refinance to obtain a better rate!

Fixed rate mortgage
Fixed rate mortgage interest rate remains constant throughout the life of the loan or until you refinance. The lender collects interest based off what they charge you to lend the money, as well as the principle of the loan. Since some of the principal is paid off every month, the total interest payment on that principal is less as well.

In simple terms, most of the monthly payments made in the beginning of the loan goes towards interest. Towards the end of the l

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