Many people often turn to a 30-fixed rate mortgage in order to take advantage of the low mortgage rate that often comes with this type of home loan. Mortgage interest rates have been very low over the past few months and many homeowners have refinanced or bought a home and got a 30 year fixed-rate mortgage in order to get a lower monthly mortgage payment along with a low mortgage rate.
However, many people who are looking for affordability in a home often wonder if a 30-year fixed rate mortgage is going to be the best option when it comes to a home loan. Anyone who may not be able to afford a very high monthly payment on their home loan might be able to benefit from the 30-year fixed rate mortgage as opposed to another mortgage.
Yet, what many people fail to realize is that a 30-year fixed rate mortgage is often going to cost the homeowner much more over the long run than, for instance, a 15-year fixed rate mortgage. Even with the low interest rate, the 30-year mortgage is going to cost, in many cases, almost double what the homeowner originally borrowed for their home.
This is obviously because of the timeframe of the mortgage, but a homeowner that is looking for affordability in the month-to-month payments of their home loan will be better off if they choose a 30-year fixed-rate mortgage.
On the other hand, a homeowner or homebuyer who may be able to afford a higher monthly mortgage payment might want to consider a 15-year fixed rate mortgage, according to many financial analysts, simply because you will pay less over the total life of this home loan.
Any homeowner who may be considering refinancing or a homebuyer who is looking into getting a new home needs to look at their financial situation to make sure that they can afford either option. There are obviously costs associated with buying a home and the same is true for refinancing. However, choosing the right mortgage is going to come down to what you can afford. No matter if you may pay more over the long run on one home loan versus another, the important thing is that the home mortgage payment is going to be one that you will financially be able to meet.