How Long Mortgage Loan Terms Can Be A Better Deal Than Short Term Loans

Once you have made the decision to purchase a home, it can be rather exciting but it can also quickly turn into a nightmare if you do not do your due diligence.

The good news though is that regardless of your financial situation, there are literally hundreds of loans to choose from. This means that you can be able to find one that meets your needs but which terms should you choose?

Short term loans compared to long term loans

Most people who decide on a mortgage loan will think that 15 year short term loans are better than 30 year terms but this is not always the case. Keep in mind though that which one you choose will depend on your finances and what you can realistically afford to pay. Shorter term loans typically have higher monthly payments which has its advantages and disadvantages.

The best way to understand the difference is to look at an example. A $100,000 30 year loan at a 7% interest rate will be about $665 for the monthly payment. On a 15 year loan at 6.75% the mortgage payment will be about $885.

If you chose the 15 year term, then after 5 years you will have paid out $22,933. However, if you chose the 30 year term, then you will only paid $5,868.

Which one you choose depends on your goals

This amounts to a difference of $17,065 over a span of 5 years. If you are looking to pay off your house as quickly as possible, then a short term loan may be ideal.

However, if you are looking to invest in other assets then this extra money can be used to build and diversify your portfolio. Another advantage of a long term loan is that it offers more flexibility as you can make higher monthly payments as you like.

Before you sign any type of loan, it is absolutely important that you get your finances in order and that you know what you can afford to pay.

This will put you in a much better position as you can be able to negotiate for better rates that work in your favor. If you do decide on a 15 year loan, then be sure you know all the risks involved before you commit to the higher monthly payments.

About the Author:
Mohamad is an online entrepreneur. Visit his site about to learn more about home mortgages and loans. You can also his pump paintball gun to learn about paintball guns and compact home gym

Article Originally Published On: http://www.articlesnatch.com

Tags: long mortgage loan terms

Related....

Videos...

Recent Real-Estate Articles

Mobile And Manufactured Home Restoration And Upgrades By: Jame Jake | Jun 4th 2012 - It ought to be clear that repairs or updating a manufactured residence is going to be a little different than working on a traditional home. In fact some trades employees may be hesitant to perform the same sort of work on a ma ...

manufactured homes

mobile homes

park model homes

Enfield Estate Agents For The Personal Touch By: Enfiled Estate Agents | Jun 4th 2012 - Enfield Estate Agents should be your first port of call if you as an individual are considering moving house to the London Borough of Enfield. We as individuals are all susceptible of thinking that we have done all the necessar ...

Enfield Estate Agents

Enfield Estate in Agents

Letting agents Enfiled

Why Are Energy-saving Manufactured Houses Unique? By: Jame Jake | Jun 4th 2012 - If you're looking for a mobile home that fuses efficiency and value, there are a few things to take a look at from the beginning. It is no secret that well-insulated walls, ceiling and floors which have enough of the right insu ...

manufactured homes

mobile homes

park model homes

Real Estate Property In Gurgaon +91 9811 999 666 New Projects Gurgaon By: HcoRealEstates.com | Jun 4th 2012 - Property Gurgaon offers luxurious lifestyle for people investing in property in Gurgaon.

Residential Project Gurgaon

Residential Property Gurgaon

Jaypee Greens Noida Expressway Boosts Rates Of Residential Apartments In Noida By: jaypee | Jun 4th 2012 - Jaypee Greens Boutique is Real estate Consultants firm in Noida offers best deals on residential apartments, flats in Noida, Greater Noida, residential properties, commercial real estate and new projects.

real estate consultants

real estate consultants noida

real estate noida

property noida

residential apartments noida

Why Should You Consider A Business Centre For Part Time Offices In Gurgaon? By: Shailendra Singh | Jun 4th 2012 - So, what do you know about a business centre? Well, you should know about a business centre, if you run a business and now want a modern office space, where your staff automatically feels like doing smart and innovative work.

Business center India

business centers Gurgaon

executive o

Assotech Blith Offering Luxury Flats In Gurgoan By: Vaneet Gupta | Jun 4th 2012 - Assotech Blith is the new launch residential project of Assotech group, located in Gurgaon at Sector 99. Assotech Blith Gurgaon is offering 2/3 & 4 BHK Apartments with covering area ranging from 1350 sq ft to 2675 sq ft.

assotech bilth

bilth gurgaon

assotech bilth gurgaon

Planning An Event In Ny By: event in NY | Jun 4th 2012 - Events and occasions are frequent which keep taking place on festivals, ceremony, competition, party, concert, or convention. Acquiring event permits New York, which is the biggest tension to organize events in NY.

Event Permits New York

Land use consultants

Brigade Golden Triangle : The Golden Life By: PropTiger | Jun 4th 2012 - Brigade Golden Triangle has been designed to provide quality life, pleasure living & comfortable future. The locational advantage of Golden Triangle is omni present.

brigade golden triangle

brigade golden triangle bangalore

Valuable Guidelines For Buying A Property By: ajay | Jun 4th 2012 - Most of the people lose patience while they purchase a property. In case of property, it might take many years for possession. To shun this type of delay, many persons focus on buying resale property. While buying a resale prop ...

Flat in Mohali

Kothi in Mohali

Comments

Still can't find what you are looking for? Search for it!

Site Navigation: