4 Reasons a 30 Year Fixed Rate Mortgage Is the Way to Go

The 30 year fixed rate mortgage is the most popular type of mortgage product available. It is affordable, secure and available to most borrowers. There are many advantages of the 30 year fixed rate mortgage over other mortgages that your loan officer may suggest.

1. Affordability

The 30 year fixed rate mortgage is the most affordable option for many borrowers. Payments are spread out over 30 years and not 15 years, making the payments much lower and allow a borrower to qualify for a home they wouldn't have been able to buy otherwise. The 30 year also is much cheaper than a 40 year mortgage because the interest rate for a 30 year morgage are lower.

2. Security

A 30 year fixed rate mortgage provides security since your payments are lower than a 15 year mortgage, and because the rate is fixed. An adjustable rate mortgage may be appealing because of it's low teaser rate, but it can be very costly once it adjusts. An ARM today that is offered at 3.5 percent today may adjust up to 8.5 percent, or more, in the future. It is wise to lock in a slightly higher rate that will stay with you for the entire life of the mortgage.

3. Tax Deduction

The tax deduction that you can claim on your federal taxes is based on how much interest you pay. With a 15 year mortgage you will pay less in interest and in return pay more in taxes. A 30 year mortgage allows you to claim the tax deduction over the entire life of the mortgage.

4. Flexibility

If you like a 15 year mortgage because of the savings over the life of the loan in comparison to a 30 year mortgage, then you can still choose a 30 year mortgage and have the flexibility to pay more. With a 15 year mortgage your payment will be much higher than 30 year mortgage since the payments are all condensed to only 15 years. If you can afford to pay more, then choosing a 30 year loan and adding to the principal every month allows you the freedom to choose when you want to pay extra. If you can't afford it one month then you are not obligated to pay.

If you chose a 15 year loan then you must pay that higher payment. On a $200,000 mortgage, you can pay approximately $500 more every month to the principle and you will pay off the loan in 15 years. If you pay double the payment you will pay off your mortgage in nine years. And if you simply pay one extra payment every year, then you will reduce your loan by seven years and pay it off in 23 years. There are so many options with a 30 year mortgage that allow to pay it off early in a way that convenient to you,

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