A 15-year mortgage costs less in the long run since the total interest payments are less than a 30-year mortgage. The cost of a mortgage is calculated based on an annual interest rate, and since you're borrowing the money for half as long, the total interest paid will likely be half of what you'd pay over 30 years.
A drawback of 30-year conventional mortgages is: you will pay higher initial rates than with adjustable mortgages.
A: Dave Ramsey recommends a 15-year, fixed-rate conventional loan.
Amenities are things such as shopping centers or sports facilities that are provided for people's convenience, enjoyment, or comfort.
Wants are things that add comfort and pleasure to your life. Some examples include a large apartment opposed to a smaller one, or a luxury car compared to public transportation. What are some basic needs and some school needs?
Social support can be thought of as the soothing impact of friends, family, and acquaintances (Baron & Kerr, 2003). Social support can take many forms, including advice, guidance, encouragement, acceptance, emotional comfort, and tangible assistance (such as financial help).
Dave Ramsey recommends one mortgage company. This one! Your monthly payment should not exceed 25% of your take-home pay. Any more than that will tie up too much of your income and slow your progress through the remaining Baby Steps.
One of the most important things to consider when buying a house is the local real estate market and how it will affect your resale value. The current state of the market in your area is a huge factor when considering homeownership.
A fixed interest rate means that the rate stays the same for the duration of your loan.
A shorter term, like a 15-year mortgage, combined with a potentially lower interest rate means you're likely to pay significantly less in total interest compared to a longer, 30-year term. This illustrates the significant interest savings of choosing a shorter mortgage term.
Prepayment penalties can equal a percentage of a mortgage loan amount or the equivalent of a certain number of monthly interest payments. If you're paying off your home loan well in advance, those fees can add up quickly. For example, a 3% prepayment penalty on a $250,000 mortgage would cost you $7,500.
Cons: Higher total interest: With a 30-year mortgage, you'll likely have a higher interest rate compared to a 20-year mortgage. Additionally, you'll be making monthly payments for ten years longer, so you'll pay considerably more interest cumulatively.
Key takeaways. Pros of a 15-year mortgage include paying less in interest over the life of the loan as a result of a lower rate and shorter term, and paying off your mortgage sooner. On the downside, the monthly payments on a 15-year mortgage will be higher due to the shorter repayment schedule.
Mortgage lenders often offer more options within the home financing field; they also tend to process applications more swiftly. In addition, their eligibility criteria may be more flexible than with larger-scale banks.
According to The Mortgage Reports' lender network, the lowest mortgage rates as of January 2025 are 7.042% (7.088% APR) for a 30-year fixed-rate conventional loan and 7.078% (7.114% APR) for a 30-year fixed-rate VA loan.
The credit score used in mortgage applications
While the FICO® 8 model is the most widely used scoring model for general lending decisions, banks use the following FICO scores when you apply for a mortgage: FICO® Score 2 (Experian) FICO® Score 5 (Equifax) FICO® Score 4 (TransUnion)
Paying a little extra towards your mortgage can go a long way. Making your normal monthly payments will pay down, or amortize, your loan. However, if it fits within your budget, paying extra toward your principal can be a great way to lessen the time it takes to repay your loans and the amount of interest you'll pay.
The 2% rule states that you should aim for a 2% lower interest rate in order to ensure that the savings generated by your new loan will offset the cost refinancing, provided you've lived in your home for two years and plan to stay for at least two more.
Two kinds of appraisals of a stressor are especially important in this regard: primary and secondary appraisals. The perception of a threat triggers a secondary appraisal: judgment of the options available to cope with a stressor, as well as perceptions of how effective such options will be (Figure 2.2).
A friend or family member can also be a great source of support, but at times you may feel you need help from a professional. Consider talking to a counsellor, psychologist or social worker who can work with you to identify the source of your stress and develop strategies to better manage it.
eu·stress ˈyü-ˌstres. : a positive form of stress having a beneficial effect on health, motivation, performance, and emotional well-being. … during positive stress ("eustress"), such as a promotion or vacation, feel-good chemicals called endorphins are released. Tracy Boyd.