Can a mortgage amortization calculator help someone choose between a 15 and a 30 year mortgage?

If someone is searching for a home loan either to refinance or purchase a new home and there is a question as to what the best loan term would be, a mortgage amortization calculator can help find the answers.  The most common loan term is the 30 year fixed arte mortgage but many borrowers often utilize or consider the options of a 15, 20, or 40 year term mortgage as well.  The difference between these loan types is fairly straight forward.  Regardless of the loan term, the amount of the initial loan is the same.  The term is just the number of years to pay off the loan amount.  The shorter the loan term, the larger the payments will be.  To make a more precise choice between the various mortgage terms a borrower can use a mortgage amortization calculator to see the differences to the monthly mortgage payment depending on the loan term or length selected.  The loan amount should not change in each calculation on the mortgage calculator, however the interest rate may very well change.  Shorter term loans generally have slightly lower interest rates than the longer term loans.  The best procedure is to obtain and use rate quotes for each individual loan term.  Once the proper interest rate information is obtained and the data is entered into the mortgage calculator, the choice of payment amount and total loan payback is up to each borrower to make sure which loan type best suits their needs.  The choice will reflect the lower payments, a longer loan and higher total costs with the 30 year term or higher payments, a shorter time period for payback and lower overall loan costs with the 15 year term loan.

This entry was posted on Wednesday, December 10th, 2008 at 4:40 pm and is filed under Mortgage FAQs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.