A 30-year fixed-rate mortgage is self-explanatory. Its term lasts for 30 years with an interest rate that doesn’t increase or decrease over time. In other words, the amount you pay in month one would still be same in month 360 whatever happens.
Like with the rest of Oregon, it’s the most popular mortgage in Lake Oswego and Portland. Apart from its elementary concept, this type of loan is attractive to borrowers for many great reasons. Here’s when it makes sense to your situation:
You Need a Big House
A 30-year term is a long period, which makes it easier to buy a bigger property. It lets you loan a huge amount of money, divide your balance into small, manageable installments, and get qualified with little fuss. This seems ideal if you have a growing family. If you currently live in an apartment complex or condo, you need more space to raise your children properly. With laxer requirements, you can obtain an adequate loan to buy a single-family with a yard and plenty of room for additions later on.
You Desire Low Monthly Repayments
No matter how much money you borrow, the 30-year amortization would make your repayments easy on the pocket. That might mean shouldering more interest over time, but affordable payments minimize your chances of defaulting and losing your home altogether.
You Want Peace of Mind
Knowing your rate wouldn’t change whatever the economic climate in the future could help you sleep at night. If the interest rates head south down the road, refinancing is always an option to lower your payments. When they do rise in the future, your budget would be protected against sudden and unexpected increases.
A 30-year fixed mortgage is not for everybody. It may not be for you if you don’t see yourself living in the same property five to 10 years from now. It pays to study all financial products at your disposal, weigh their pros and cons, and evaluate your situation with foresight.