The Pros & Cons of a 30-Year Fixed Home Loan

The Pros & Cons of a 30-Year Fixed Home Loan

30-year fixed-rate mortgages are one of the most popular types of loans people get from mortgage lenders to purchase their homes. This type of loan has a fixed interest rate that never changes over the life of the loan. Even if rates go up over the 30-year period, the interest rate on your loan will not.

Other pros of 30-year fixed-rate mortgages include:

  • Monthly payments are the same, which makes budgeting easier.
  • The monthly payment is typically less compared to other mortgage loans.
  • It’s an ideal loan choice for home buyers who intend to stay in their home for 10 years or longer.
  • FHA 30-year fixed-rate mortgages could only require a 3% down payment

Even with these benefits, there are a few cons to 30-year fixed-rate mortgages you need to be aware of, as follows:

  • You may require private mortgage insurance.
  • You could pay more interest over the life of the loan, compared to a shorter fixed-rate-term loan.
  • The total costs of borrowing can be more if you only keep your home for 10 years or less.
  • It can take longer to build equity in the home, depending on the amount of your down payment.

To learn more about 30-year fixed-rate mortgages and other types of mortgage loans, please feel free to contact Elite Financial at (800) 908-LEND or (805) 494-9930 today! We offer a wide range of mortgage options to help you purchase your home.