If you are shopping for a home mortgage or considering a refinance, chances are you’ve heard of both a 30-year home loan and a 15 year home loan fixed rate option.

Both loan types offer their own set of advantages and disadvantages. Here are a few pros and cons to consider to help you choose which mortgage loan option is best for your situation.

30 Year Mortgage Pros & Cons

PROS

  • Lower monthly payments
  • Extra cash each month for other investments, savings, or emergencies
  • A low-interest rate is locked in for 30 years. Insurance and taxes can change, but your rate won’t.
  • No penalty to pay extra each month.  You’ll have the flexibility to make extra payments and pay off the mortgage faster.
  • Can qualify for a higher loan amount – purchase/build a larger home or include extra features.
  • Meatier tax deductions

CONS

  • Higher fixed interest rate compared to 15-year loan
  • You’ll pay much more interest over the life of the loan
  • Equity accumulates slower

15 Year Mortgage Pros & Cons

PROS

  • Lower interest rate
  • Build equity faster
  • Pay much less interest over the life of the loan
  • No house payment after 15 years

CONS

  • Higher monthly payment
  • Qualify for a lower loan amount
  • Less available cash for investments, savings, or emergencies

So where to go from here?

There is no doubt that this decision is a big one, so don’t rush.  Your decision will affect your personal finances for many years to come.  A good next step would be to evaluate your long term goals and consider which loan type will best facilitate your goals.

Some of our clients want a 15 year to eliminate all their debt as fast as possible, and others choose a 30 to minimize their monthly payment.   Some choose a combo of both by choosing a 30-year loan, but making extra payments each month to pay the mortgage down faster.

Whatever your situation, goals, and desires are, we can help.  Contact Capital Mortgage today, and one of our loan experts will answer all your questions, and provide as much information as we can to help you make the best decision.

Call

208-854-7800

Or contact us online!