Step by Step Mortgage Guide

30 Year Term Versus 15 Year Term?

MortgageloansNJ.com

As simple as it may sound, deciding whether to get a 15-year or a 30-year term mortgage is not that simple at all. There are different advantages for each that should be considered. One area that is not a factor is taxes. If anyone tells you there are more tax benefit its only because you are paying more taxable interest over a 30 year loan versus a 15 year loan. Now that you have that insight, take a look at our comparison.

15 year Term Mortgage Benefits :

• Build Equity Faster
• Own your home faster
• Conservative investment of available money

15 year Term Mortgage Disadvantages:

• Higher Payments
• Less Money Can be put towards Savings and Investments
• If something happens it can harder to cover the higher mortgage costs. This could include a parent getting ill or even a loss of overtime, could have an adverse affect on paying the highs mortgage payments)

Conclusion: A 15-year term is a good idea if you are looking to build equity quickly and you have cash reserves to offset the unforeseen.

30 year Term Mortgage Benefits:

• Lower Payments
• More Money available for savings and other investments
• You can make extra payments when possible and treat the loan like a shorter term loan
• Have more money available to make purchases without having to use credit cards

30 year Term Mortgage Disadvantages:

• Takes longer to pay off your loan

Conclusion: A 30-year term allows you more flexibility since you can use the extra money for investments and other costs. Also if you feel you would like to make more payments, you always have the option to pay more. With a 15 year mortgage or any type of mortgage, they will not let you pay less than your monthly payment.

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