One of the most important decisions that you will make when choosing your home mortgage loan is determining the term length. And home mortgage loan terms are becoming more interesting and more flexible. You can even get a home mortgage loan that lasts for 50 years! While this may seem like an ideal situation for someone who can’t make larger payments, it requires some thought.

Home mortgage loan term plays a part in your interest rate. Generally speaking, the shorter the loan term, the lower the interest rate. This means that a 40 or 50 year home mortgage comes with a rather hefty interest rate. And then you are paying this elevated interest rate for a longer period of time (remember: the Rule of 72 works against you, too!). This higher rate, paid out for longer, translates into a lot more money that you end up paying overall.

Carefully think through your home mortgage loan possibilities. Carefully consider whether you can really afford to buy a home right now. And see if you can handle 30 year payments. If you are in a really good position, it is worth looking into even shorter loan terms, such as 15 or 20 year loans.

Tags: home mortgage loan, personal finance, financial planning, finances,
mortgage 50 years, home mortgage, mortgage loan, rule of 72