Let’s face it—dealing with mortgages and loans can be pretty daunting, especially when you’re faced with a number of considerations and options. Because of this, one may resort to choosing a particular option since it’s a “popular” choice, but that shouldn’t be the case.
When choosing between mortgages, it’s important to choose one that fits your goals, financial health, and capabilities. So when it comes to buying a home, working with a reliable mortgage lender is key to ensuring you’re financially secure along the line.
But mortgages can indeed be pretty complex, and paying for long periods can feel disheartening for some people. However, it pays to learn more about term length options, so you know what fits you.
What is the Average Home Loan Length in the US?
It will take a certain amount of time before you can completely pay off a loan, and this period is referred to as the mortgage term. In the US, a typical mortgage term is 30 years, giving the borrower about 30 years to pay back their loan.
However, most people don’t keep their original loan for 30 years as the borrower may refinance their loan or purchase a new home when their term is up.
What are the Different Mortgage Length Options?
There are two types of mortgage length options: a fixed-rate mortgage or an adjustable-rate mortgage. With a fixed-rate mortgage, you’re dealing with a loan where the interest rate stays the same throughout your term, while an adjustable-rate mortgage has an adjustable interest rate throughout the loan term.
With that being said, knowing what type of rate you’ll get correlates to your loan length, so it pays to be aware of the different term length options, so you choose what’s best for you.
- 15-Year Mortgage: The reason homebuyers get a 15-year mortgage is because of the total interest paid. When you have a shorter mortgage term, you pay off your loan quicker, and you pay less total of your interest. However, it has some disadvantages, such as having higher monthly payments.
- 30-Year Mortgage: As mentioned previously, the 30-year mortgage is one of the most common loan terms in the US. With this length, you can either choose to have a fixed or adjustable interest rate. Because payment is spread out, you get to pay lower monthly rates, but sadly, you might pay more total interest.
- 20-Year Mortgage: If a 15-year mortgage is too tight and a 30-year mortgage is a bit too spread out, a 20-year mortgage is a perfect compromise. Fortunately, 20-year mortgages can help you save on total interest rates, giving you more flexibility, even with a slightly higher monthly payment than a 30-year mortgage rate.
The Bottom Line: Work With a Mortgage Company to Find the Best Option for You
Seeing as there are a bunch of factors to consider, you must reach out to a reliable mortgage company so they can help assess your financial situation and see what mortgage option fits your needs. By doing this, you can create a solid financial plan that will help you pay off your mortgage with ease.
How Can We Help You?
If you’re ready to take that big financial commitment and purchase your dream home, it’s time that you take hold of your homeownership story with our team.
Waymaker Mortgage is a mortgage company that serves a mountain of states in the US. We help clients purchase financing and refinancing with low rates and fees, making them a step closer to successful homeownership.
Learn more about our services today!