10 year treasury mortgage

Many people focus on the interest and the numbers of a loan until they just can not see. In truth, the life of the loan is just as important if not more so.

The term of a home loan is simply the number of months you will repay it. Most relate to the term of years easily, but the 30-year mortgage is really 360 months in the view of lenders. If you take the time to think through the loan, you will soon be seen, the term can be tweaked to make you serious money on interest.

The traditional loan has a maturity of 360 months or 30 years. Most people accept this concept without blinking an eye, but that for a moment. They are committed to the monthly payments for 30 years. It's like the parents of children who have never grown up and left the house. If you are 30 years old when the loan that you pay for, until you are 60!

To shorten the duration of most loans, borrowers are often advised to consider terms of 180 months or 15 years. When you sign up for this election period, you save a package to the total amount of interest on the loan. They are also usually a lower interest rate because the lender views the loan as less risky, since the repayment is done in half the time the 30-year loan option.

There is a problem with the 15-year mortgage. The monthly payments. Although you will usually be charged a lower interest rate, the reduced payment period translate to higher monthly payments. Payments may be a few hundred dollars, or they may be significantly more. The answer depends on the value of your home. Regardless, this increase in payment amount is hard to swallow. Are you really sure you will always be able to pay? Many are not.

If you are ready to show some discipline, you have the advantage of 15 years without committing to higher payments. The trick is to build a 30 years loan for home purchase. Next, calculate what the 15 years would repay on a monthly basis. If you are in your payment, send in the 15 years amount. The money is for the most important and you are essentially paying your loan early.

It should be pointed out, this strategy is not a favorite of lenders. You can find out about them, but there is nothing they can do for you from using it. The only things that you should look out for any prepayment penalties. If you loan it, you probably do not want to use the strategy until after the pre-payment period has expired.

Sergio Haros is with Great Western Mortgage - Providing refinance California pay programs.