Mortgage Borrowing Tip Length Of Loan

Mortgage Borrowing Tip Length Of Loan



Mortgage Borrowing Tip - Length of​ Loan
When borrowing money for a​ mortgage,​ homebuyers are primarily concerned with simply qualifying .​
Still,​ paying attention to​ the​ length of​ the​ loan is​ a​ borrowing tip that can save you​ a​ ton of​ money.
Home Loans
In the​ mortgage industry,​ the​ length of​ your loan used to​ be the​ only major issue you​ had to​ deal with .​
How times have changed! in​ the​ current market,​ the​ variety of​ loans that exist are simply stunning .​
Of course,​ the​ massive increase in​ loan options has inevitably led to​ massive confusion .​
Borrowing Tip
Regardless of​ the​ type of​ loan you​ go with,​ you​ should always try to​ keep your loan term as​ short as​ possible .​
The shorter the​ loan period,​ the​ less you​ will pay in​ interest .​
Here an​ example using 15 and 30 year loans .​
Assume our first homebuyer gets a​ $100,​000 loan at​ 8 percent interest .​
He length of​ the​ loan is​ 30 years with a​ monthly payment of​ $733.76 .​
For this mortgage,​ our homebuyer is​ going to​ pay $164,​155.25 in​ interest over the​ life of​ the​ loan .​
Now,​ take the​ same scenario,​ but reduce the​ term of​ the​ loan to​ 15 years .​
Our homebuyer is​ going to​ see the​ monthly payment bumped to​ $955.65 per month .​
Over the​ length of​ the​ loan,​ our homebuyer is​ going to​ pay $90,​000 less in​ interest payments over the​ life of​ the​ loan .​
On top of​ this,​ the​ house will be paid off in​ half the​ time .​
When borrowing money for a​ home purchase,​ you​ have to​ carefully budget your finances .​
If you​ can afford increased monthly payments,​ however,​ a​ shorter loan length is​ going to​ save you​ a​ lot of​ money over time.




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