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Real Estate tsi
iouh tiouinc Eileen M. Day realtor
SHORT OR
LONG-TERM LOAN?
In the old days, when you financed your home with a fixed rate mortgage, it was a long-term loan— period—usually around 20 or 30 years. However in today’s super market selection of mortgages, even the fixed rate variety has a choice. A major fork in the road now involves the term (length of loan) of fixed rate mortgages. Do you choose a long term, fixed-rate loan or a short-term, early ownership variety that usually runs in the 15-year range?
The principle of leverage separates the two borrowing philosophies. If you want to borrow as much as possible for as long as possible, for the lowest monthly payments, you want the leverage and should select a 30year loan. On the other hand, shorter term, fixed rate mortgages can achieve significant savings in total interest payouts and faster equity buildup.
Those who can afford the slightly higher monthly payments would be wise to consider the hsorter term program and its money-saving, earlier retirement of the debt.
If there is anything we can do to help you in the field of real estate, please drop in at EILEEN M. DAY, Realtor, Tlie Clopton House, Washington, Va. 22747. Phone: 674-3400. We’re here to help. Si
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