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Which Is Better? Looking at 15 Year Mortgages and 30 Year Mortgages

Thinking about buying a home in Bucks County, PA? Then think about the length of the mortgage loan you need. 

The majority of U.S. home buyers choose either a 15 year mortgage or a 30 year mortgage. Home mortgages in Bucks County are no different. How do you decide? These questions will help decide which one is right for you. 

How Much Can I Afford?

Don’t bust your budget by choosing a home loan that will suck up a large chunk of your monthly income. Look at the monthly payments. If you can comfortably handle it, choose a 15 year mortgage, because you’ll have it paid off in half the time! However, if those payments don’t leave you a cushion for other financial obligations or unforeseen emergencies, opt for a 15 year mortgage. 

What’s the Home Price Compared to Your Income?

Buying a home in Bucks County can vary from a moderate to a seven digit price tag. Be sure to weigh the cost to your income. If a 15 year mortgage takes up over 40% of your take-home pay, it’s smart to choose a 30 year mortgage. 

Do You Have Other Financial Obligations?

Credit cards, student loans, children’s tuition, and retirement savings require examination. If you don’t have many other responsibilities, choose a 15 year mortgage. But, if your expense list is long, a 15 year mortgage makes more sense. 

What’s the difference in the interest rate?

Sometimes the interest rate on 15 year mortgages are lower than 30 year. If the former is only a few hundred dollars more, it pays to choose that one if you can financially swing it. 

There are several considerations when choosing the length of your mortgage loan. If you are living in Bucks County, start the decision process by talking to a professional lender about your options.