Did you know you can choose the length of your mortgage? Everyone is familiar with traditional 15 and 30 year mortgages but times have changed. In this streamlined age you can now pick your terms be they 6, 22, 17 or even 9 years? Imagine your quality of life without a house payment. What's great about choosing your mortgage term is control. It's possible to select your term length based on your goals, monthly payment amounts and time frame. We've always been able to get out from under a mortgage with extra principal payments but that takes discipline and a mental monthly reminder. If you select your term from the get-go there is no discipline and reminder necessary. It's all built in. Easy.
Example: take a look at payment and term options for a $300,000 loan. A 30-year mortgage at 3.5% requires a $1350 monthly payment. In 30 years that $300,000 is paid off but you've also shelled out a whopping $185,000 in interest A 15-year mortgage at 3.0% takes $2070 per month. After 15 years the $300,000 debt is gone along with roughly $73,000 paid in interest. A 20-year mortgage at 3.25% costs $1700 per month and $109,000 in interest over the term of the loan. This model reveals the significant difference in one's monthly payment and overall interest paid to purchase your home. Now, under the new mortgage terms you can figure out what payment works for your budget and the length of time you want to carry the debt. Obviously, the shorter the term of the mortgage, the higher your monthly payment, but you decide what you can handle financially. Any uncertainty about that decision can be alleviated when you work with an experienced professional mortgage company that takes the time to walk you through newly available mortgage scenarios. Fortunately, there are many financial possibilities that allow you to retire a mortgage according to your own timetable.
Think about your current budget. Is it working with the bills and goals you have? Play with calculators online, but your best bet is a mortgage expert who will create a personal profile and plan that positively frames your future.