If you are getting ready to buy a house and apply for a mortgage, the first question that you are probably going to ask yourself is should I get a 15 year or 30 year mortgage? Who doesn’t want to have their house paid off 15 years from now? But you may not have a choice. If the minimum house that you can live with requires a mortgage payment that you can’t afford on a 15 year term, you probably don’t have a choice. But for many people, there may be some things you could choose between.

Before You Begin, Consider Your Current Financial Situation

Before you take the plunge, please consider your current financial situation before applying for a loan:
•How much are you paid each month?
•What are your monthly debts and bills?
•What is your credit score?
•What are your savings and other investments?

A mortgage calculator can help you get an idea of how much you can afford per month, but always seek the help of a professional financial advisor and mortgage loan officer. They will help you understand your finances and find the right mortgage for you.

Always budget responsibly before taking on large financial burdens like a mortgage.

30 Year Mortgage: Lower Payments

If you opt for a 30 year mortgage, you will have lower monthly payments, but obviously a longer pay-off period. This option is a good choice if you plan on being in your home long term, for example, if you are a young family just starting out.

In fact, 30 year loans are considered the most popular. According to Investopedia, in 2015 more than 2/3 of all mortgage applications and 86% of all purchase applications were 30 year.

15 Year Mortgage: Less Interest

There is less interest on a 15 year mortgage, but your monthly payments will be larger than a 30 year. A 15 year mortgage can benefit you if you are close to retirement and do not want the responsibility of a mortgage in retirement.

30 Year Mortgage: More Investment In Personal Savings

Because your monthly mortgage payments are lower, a 30 year mortgage allows for more investment in your personal savings, as well as being able to pay off debts like student loans and credit cards.

By having a financial cushion from saving up, you can invest in other opportunities like home improvement or remain secure if your financial situation changes due to hardship like unemployment or illness.

15 Year Mortgage: Build Equity Faster

Since you will be paying more per month and in less time with a 15 year mortgage, you will have the advantage of building up your home’s equity faster than a 30 year mortgage. Then, you can use that home equity as you need, be it a home improvement or paying for college.

Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net