From 'down payment' to 'adjustable rate' to 'debt-to-income' ratio, there are so many terms involved in the mortgage process that it can be hard to learn them all and keep them straight. However, whether or not you've heard it, the term 'amortization period' might be one of the most important ones associated with your financial well-being. If you're currently considering the period of loan you should choose, here are some things to think about before taking on a term. What Is Amortization? Used to refer to the length of time it takes to pay off your mortgage loan, a typical amortization period is 25 years. However, there are many periods over which homebuyers can choose to pay off their … [Read more...]
Understanding Mortgage Amortizations and Why Longer Periods Can Cost More
Buying a home is one of the largest investments you will make in your life, and that's why so many people have longer mortgage amortization periods to pay down the principal. While it may seem appealing to have a longer amortization period, here's why an extended loan term can end up costing you more and may be less financially beneficial when it comes right down to it. About Mortgage Amortization Generally speaking, a 25-year mortgage amortization period can be typical, but there are many loan periods that a homebuyer can choose for amortization. While a longer-loan period may seem enticing because it will mean a smaller monthly payment, a shorter amortization will enable you to own your … [Read more...]
Is Now the Time to Consider a 15-Year Mortgage? Five Reasons to Give the 15Y Another Look
A 15-year fixed mortgage is, as its name suggests, a mortgage that's paid off after 15 years. Since it amortizes fully, after that amount of time you won't have to pay anything else. This type of mortgage has a lot of benefits, and below we'll share just a few of them. 1) No Need For Payments After Retirement Here it highly depends on when in life you choose to take on the mortgage. However, most people decide to take on a mortgage at around 30 years of age. If this is the case for you, then it means you'll be 45 years old when your mortgage will be fully paid. There will be no need to worry about having to use Social Security or pension checks to pay it off. Another consideration is the … [Read more...]
