How St. Louis Homebuyers Can Find the Right Mortgage
As St. Louis homebuyers you are likely looking at a variety of mortgage options that are available to you. And nine times out of ten, you are probably noticing that there are more options than you had originally anticipated.
The fact that banks offer a wide variety of mortgage options can be both good and bad for St. Louis homebuyers. It’s wonderful that you have so many options available to you, but choosing the right option can be hard.
Read below to uncover the factors that St. Louis homebuyers should consider.
15 vs. 30 Years
When St. Louis homebuyers look at different mortgages, you will see that the first difference between a 15-year and 30-year mortgage is how long the loan lasts for. With the former, your home loan payments will be spread over a fifteen year period; with the latter, your home loan payments will be spread over a thirty year period.
When you opt for a longer mortgage loan, such as a thirty year term, your individual monthly payments will be smaller than your individual monthly payments with a shorter-term loan. However, a longer-term loan means that St. Louis homebuyers will actually be paying more over the life of the loan.
This is because you will be paying interest on each month. And since your term is longer, you have more interest to pay which adds up over time.
Still, many St. Louis homebuyers consider the 30-year mortgage loan option for the smaller monthly payment upfront. This smaller monthly cost is one of the reasons why longer-term loans tend to be a option chosen by many first-time St. Louis homebuyers or young homebuyers. This is especially true if they are looking to remain in the same home or at least the same community for a very long time.
Understanding the Benefits
There are benefits to each mortgage type. Benefits of a shorter-term mortgage loan, such as the 15-year mortgage, include the savings of extra payments in interest. Yes, with shorter-term mortgages, the loan payments are higher each month when in comparison to a smaller-term loan. But you will be able to save more on interest than you might have originally expected.
Some estimates state that opting for a shorter-term loan like the 15-year mortgage can save you upwards of $100,000+ simply in interest alone. If St. Louis homebuyers have the ability to swing these payments each month, you can clearly see why this is a strong option for St. Louis homebuyers to at least consider.
Choosing the right mortgage loan option for you is a personal decision that depends upon your personal goals. What do you want to achieve? Where do you ideally plan on staying? What do your finances look like? Understanding the answers to these questions up front can help St. Louis homebuyers save over the long haul.