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Many people struggle with deciding whether they want to do 30 year or 15 year home mortgage loans (St. Louis).   The very first thing you want to consider is your personal financial situation and what your intentions are for buying your home or refinancing. You want to make sure you are able to make the monthly mortgage payments and not risk the chance of affecting your credit score or increasing your chance on getting another mortgage. The second thing you want to consider is finding a trustworthy local mortgage banker that has done home mortgage loans (St. Louis) for your friends and family. Once you have selected a mortgage professional, you might want to set up a meeting to discuss the best term option.

Most people don’t realize the pros and cons of a 15 year and 30 year home mortgage loans (St. Louis). The best thing to do is get a pad of paper and write down a list to figure out if paying less per month is the best option.  When deciding the length of your loan, you might want to have your mortgage banker look at your credit score and your financial assets such as your retirement fund and savings account.

If you would like to take a “safer” approach you might want to consider a 30 year mortgage term. This will allow you to have a lower payment option but the pay-off period is longer. If you don’t want to cut back your contributions to your savings and retirement fund, you might want to consider a 30 year mortgage term. This will give you increased cash flow, allowing you to save money for other investments such as child’s college education. However the downside of 30 year mortgage term is it doesn’t chip away your principal balance significantly until the 15 year mark.

When you choose a 15 year mortgage term this is less expensive in the long run because you pay less overall interest. If you can make your monthly payments, this would be the best option for you because it would save you money in the long run. The 15 year mortgage term may look good on paper because the interest rate is lower than the 30 year interest rate.  However in exchange of a lower interest rate, you will have higher monthly payments. It is very important you get financial advice on home mortgage loans (St. Louis) so you are able to set up a financial plan that works for your entire life.

One of the best ways to map out a plan on what you can afford is using a mortgage calculator. Whether you are buying or refinancing a home, a financial calculator can help figure out how much money you can borrow. Before shopping for a home or mortgage, you might want to check out our mortgage tools on our website. Feel free to contact a Cornerstone professional if you have any questions.

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