Because the 30-year fixed is amortized over 30 years, you have 360 payments to pay back the loan, which allows for less principal required each month. Instead of being committed to a larger monthly payment (such as you would with a 15-year fixed), you can choose whether to pay the normal payment or pay extra each month. By paying a little extra each month, you can cut several years off the loan, but again, it’s your choice. No commitment to make the larger payment.
30-year fixed mortgages are great for people who plan on staying in their home for many years. If you don’t think you’ll move or refinance, this is a great choice to keep your payment low and predictable. The 30-year fixed mortgage is a conventional loan, meaning it’s backed by Fannie Mae or Freddie Mac. The FHA loan and the VA loan have 30-year fixed versions that might be a great choice also.
One last thing: You can borrow up to $3,000,000 with the 30-year fixed and buy a home with as little as 5% down. This can vary depending on the size of your loan, so make sure to check with a Home Loan Expert as to what your minimum down payment or equity requirement is. That’s it. Enjoy the video and let us know what you think.
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