Hey Noobs - news flash!  Lower mortgage payments are not going to improve your life.  The hype on tv and radio is 'refinance!' 'lower payments' 'pay off quicker'.  With all these mixed messages, who the heck knows what to do?

Your probably thinking "What the heck does this homepwnerer guy know!" right?  Truth is, ultimately its on you to decide - i'm just trying to keep you noobs from making stupid decisions.

The 30 and 15 year fixed mortgage are the most popular forms of mortgages used by lending institutions.  They are also the more safe of the many loan types that brokerages offer.  Discerning what type of mortgage you should have is a personal choice based on your finances and ability to sustain payments at the quoted rate.

For example, if you had a $800/mo. payment by taking out  a 30 year mortgage , you may have a 1000-1100/mo. payment with a 15 year fixed. 

This could be a savings of up to 300/mo. for the life of the loan when going with a 30 year note.  Not bad right?  Well, this depends on your circumstances, but if you ask me, always take the 30.

Many families opt for the 30 year mortgage because it allows them to buy a larger home with smaller payments - this is only half right.  Although the newbies can buy a larger home, the property tax burden is also more and thus the cycle of paying more principal/interest/taxes/insurance (PITI) is increased. 

On the other hand, with the 15 year note, you may be able to save 90k over the life of the loan.  However, you may run the risk of losing your house if you can't meet the higher payments. 

Basically, it comes down to risk.  Whether your trying to save yourself a few hundred bucks by going with the 30 year fixed or just paying off the loan quicker, its best to error on the side of a lower risk factor.  Not only that, the 30 year mortgage will give you the ability to act as a 15 year loan if you really have your heart set on paying off the loan early.  You just need to label a second check each month with "Pay Toward Principal" and submit it with your mortgage payment.

Heres a bonus hint - don't drop all your cash into your down payment, especially if economic conditions are scary or you have a shaky job position.  You stand the chance of losing all your down payment if you lose the house. 

 So, since you shouldn't drop a lot on the down payment, your saying "Ya, but what about Property Mortgage Insurance?"  Rule of thumb - if you have to pay pmi, you paid too much for the investment.  Try to stick with as low a down payment as you can, just in case you have to bail out.  Not the greatest scenario, but it keeps your cash safe

By taking a 30 year mortgage, you can assure yourself that when things are going really well, you can make extra payments. And when the market is crap, like it has been since Mid 2007, you can survive the storm and ride the wave home!  In the end, its your decision n00bs - I won't lose sleep.

L8r,

I got homes to pwn