Most people would usually prefer a 30- year fixed rate mortgage when buying a house. According to one of the government- sponsored body that helps homeowners with their mortgage, a 30-year mortgage plan is the most popular house financing option. But even if you’re planning to get the traditional mortgage term, there are other options available that you can choose from.
Paying in Full
Only a few homebuyers can afford this, but if cash isn’t really a problem for your, then this can be a great choice. It’s also not as rare as you might think. Based on the home sales a few years ago in states like Louisiana, over one- third of U.S. home sales were all paid in cash.
It’s actually quite a nice option for people who has the budget. This would prevent them from getting any interest rates which can actually make the total amount that you paid for even higher.
15- Year Fixed- Rate Mortgage
This type of mortgage is shorter than the traditional one. Based on mortgage experts in states like Louisiana, this is also the next best option aside from the traditional mortgage term. The only issue with this type of mortgage term is that the monthly payments will be much higher than the 30- year mortgage. However, you’ll be able to pay off the loan much faster if you choose this one.
According to some experts 15- year mortgage term comes with an average interest of at least 1.5 percent lower than the 30- year mortgage term. This will save you thousands of dollars once you’re done with your mortgage.
20- Year Mortgage Term
20- Year mortgage term is fairly considerable if you can’t afford the monthly payment for a 15- year mortgage. This is also considered to be much better than the traditional term since you can finish your loan 10 years earlier than the 30-year fixed rate mortgage.
5/1 Adjustable Rate Mortgage
5/1 Adjustable- rate mortgage works by requiring you to pay low fixed interest rates for the first five years, then the remaining 25 years of your mortgage will be adjusted yearly until you’ve fully indexed the interest rate. This is very nice options for buyers who will have an increase in the next coming years. They will only get charged with low monthly payments for the first few years until they’re stable enough to pay the interest rate every month.
Knowing the options that you have been a great way to make a sound decision when it comes to your house loan. Just make sure to consult an expert to know more about these mortgage rates. You may also try to check other options available to give your choices.<< Back to the list.
Start Your Quote →
Primary Residential Mortgage, Inc.
Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice.