As you begin the process of buying a new home, there will be several financing decisions that you will need to make.

One of them, is whether you will get a 15 or 30 year mortgage.  There are pros and cons of both.

In a 30 year mortgage you have 30 years to pay off the loan.  That makes your payments lower than a 15 year loan, but it also means you pay much, much more interest.

Also, a 30 year loan is a little easier to qualify for since the payment is lower.  But it has a higher interest rate than a 15 year loan.  The reason is that the bank sees the 30 year loan as a higher risk since you have 15 years more on which to default on the loan.

In a 15 year loan, the payments are higher, the interest paid is less, and the rate is lower than a 30 year loan.

I normally suggest my clients get a 30 year loan.  That way you have a lower payment.  And if you want to pay more to pay it off faster you can, but you don't have to.  Sometimes money is tight, and a lower payment could help.  Regardless of which loan you get, you should pay as much extra every month as you can.  This will reduce the total interest paid over the life of the loan by thousands.

Need help deciding?  This is what I am here for.  Just give me a call and I will walk you through all of your options.

Sincerely,

DAVID MENNEN
Mortgage Consultant, Owner

Tippecanoe Mortgage, Inc.
1221 S. Creasy Lane, Suite J
Lafayette, IN 47905
Direct: (765) 448.3200
Fax: (765) 448.6398
Email: dmennen@tippecanoemortgage.com
Website: www.DavidMennen.com

The #1 FHA Lender in Tippecanoe County - Since 2003!

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