40 year mortgage terms

Basics

A 30 years mortgage term is a traditional length for a mortgage.

The newly available 50 years duration allows a borrower to extend the repayment schedule and reduce their monthly payments.

In an environment in which prices rise, this is a way of getting a lower monthly payment.

A 50 years is not the same as a 50 year fixed mortgages.

A mortgage in 50 years only means that the loan is 50 years. The loan actually only for the first 30 years of the loan. You need to select your specific offer from the lender.

Identifying A 50 Year Mortgage Payment

A 50 years mortgage litlte is a little more than 10% lower than the same size and loan interest on a 30-year loan term.

For example, a 30-year bond:

* With a $ 335,000 balance
* 6% Interest
* 30 years loan term
* The regular monthly payment of $ 2008
* Interest Only Payment $ 1675

For a 50 years loan, the following happens:

* With a loan of $ 335,000
* 6% Interest
* 50 years loan term
* The regular monthly payment of $ 1763
* Interest Only Payment $ 1675

You will find that the interest only payment is the same in both scenarios. This is because the interest only payment only when the loans and interest, but not the loan term.

How can you a loan of 50 years is much lower than 30-year loan, but not so low as only one interest payment.

There are many free online mortgage calculator to help you this picture.

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