What are the Advantages of a 30-year Mortgage?

If you want to buy a house, but you realize that no matter how much you try to calculate and save money in the short term, you cannot get enough to be able to purchase the home that you want and need. But there is a solution for this situation: getting a loan, which is a financial instrument invented since the ancient times. From the first banks in Assyria and Babylon that granted grain loans to farmers, we have today multiple financial instruments, some of them extremely complex, their role being to make our lives easier – and also make profit for bankers, that`s true.

If you consider a mortgage, you can take it for long term (30-year mortgage) or short term (15-year mortgage).

There are many advantages of 30-year Colorado mortgages. Besides being one of the only loan solutions through which some people can actually afford a home, the mortgage comes with a number of other benefits.

First, it allows you to buy a house without having to save tens of thousands of dollars. You will only pay an affordable monthly interest, during the duration of the contract. The longer the repayment period, the lower the monthly payment. You will pay more in the long run, but the money you will have to take out from your pocket each month will not be a burden, and besides, you can also get a higher amount of money, which means that you can buy a bigger or more sophisticated home.

With a mortgage, you pay the installment for your own house, which is better than paying a monthly rent for a house that is not yours.

So, if you find yourself in a situation where you have to pay rent in order to have a home, you might want to consider a Colorado mortgage instead. The monthly rent can become the monthly interest for your own home. Thus, in maximum 30 years, you can be the owner of a house, instead of paying a rent for a home that does not guarantee you a permanent stay.

Other advantages of a 30-year mortgage include:

• You may be allowed to rent the house even if you still have a mortgage on, which can be beneficial in some situations, allowing you to make some extra money. However, you will have to discuss this aspect with your mortgage lender. Some mortgage lenders will allow you to rent with your existing rate and terms, while others may charge an extra fee, ask you wait a few years before granting you the option to rent, or require you to refinance.
• You have the possibility of early repayment, if you can afford it and decide that this is what you want
• It can be an investment for a real estate business
• You can get a mortgage refinancing in better lending conditions

Find out how much you can afford to pay monthly

Considering that failing to pay your mortgage installments entails the takeover of the house by the banking institution that granted you the loan, it is very important to make a few calculations and find out how much you can actually afford to pay each month. As a rule, the monthly rate should not exceed 30% of your monthly income. This helps you to cover your current expenses and possible unforeseen situations, without worrying that you cannot pay the installment.

For your peace of mind, you can choose a fixed-rate mortgage to avoid expenses that may arise amid rising interest rates.