Why a 30 year mortgage for First Time Home Buyers?

first time home buyers

English: Mortgages sold everywhere. (Photo credit: Wikipedia)



Why a 30 year mortgage for First Time Home Buyers?

Is the popularity of 30 year mortgages justified by the facts? Consider the factors enumerated in this brief analysis and decide for yourself if it is right for you, the first time home buyers

Look at a 30 Year Mortgage First

First time Home buyers like them because they know their payments will not change. Young first time home buyers like them because they are confident that their income will rise and as housing costs become a lesser percentage of their total expense burden they will have more money for other things. Other things may include college tuitions, retirement or vacation travel. The 30 year mortgage terms are geared to affordability in a market place where buyers seem to have ever dwindling financial resources.  All mortgages have a due date on the 1st of the month but payments are not considered late until the 16th.

A 30 Year Mortgage Maximizes Tax Benefits

Because the 30 year mortgage loans amortize principal very slowly they maximize the benefits of the mortgage interest tax deduction. This, of course, also means that homeowners accumulate equity in their homes very slowly. The danger is that a small down payment may meet a declining market.  Investing in a home is never without some risk.  When prices were rising rapidly everyone thought they were a financial genius.  Unfortunately in the last several years there were fewer and fewer people bragging at cocktail parties about how their home was their guaranteed retirement fund.  What the future holds is anyone’s guess.  It certainly seems like now is a wise time for first time home buyers to consider home ownership.  A 30 year mortgage is where most people start.

What About an Interest Only Mortgage?

Unless you have a very large income or are of sufficient sophistication to consider an interest only, adjustable rate or balloon mortgage you, like most buyers, will be more comfortable with a traditional 30 year mortgage than with anything else.  If this latest uptick in home prices stalls for whatever reason you will get killed or wounded so badly if you have a gimmick mortgage that it will take many years to recover.
Cultivate a good relationship with your banker or other trusted professional so that you can discuss your own situation in a frank and open way that precludes the wishful thinking on your part that we can all be guilty of at times.


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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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