Since 1954, the 30-year-fixed-rate mortgage has been the standard for American home buyers. What makes this the go-to mortgage option for most people is the affordability and predictability. With payments being made over a longer period of time, the monthly bill is lower and the principal and interest amounts are fixed. You’re never getting a surprise when you open your bill. That’s important for a lot of people.
But as times change, the 30-year-fixed-rate is no longer the best option for everyone. There are several factors to consider when deciding which type of loan is best for you. Your income, credit score, down payment amount, and the size of the loan needed, are all things to take into account. What factors should you consider when deciding on the kind of mortgage you should have? Keep reading to find out if a 30-year-fixed-rate mortgage is right for you, and click this link to read the full article.
Sign No. 1: You plan on moving again in a year
The whole point of a 30-year fixed-rate mortgage is to spread out your payments over the long haul, so if you might move in a few years, what’s the point?
There are exceptions, but three years is a common rule of thumb for how long you need to own a home in order to recoup your investment by selling it. Some housing experts suggest that five is a more accurate minimum.
The moral of the story? If you’re planning to sell within a year, you’re probably better off renting for a year instead of buying.