Mortgage - Home Mortgage

Mortgage Rate
30 Year Home Mortgage Rate

The most common home mortgage interest rate in the United States is the 30 year mortgage rate. This term refers to the amount of time that it would take the person to pay off the mortgage if they made only the monthly mortgage payment.

Historically, it was thought that it would take the average homeowner 30 years to pay off their mortgage. So most mortgages were and are issued with a 30 year mortgage interest rate.

The advantage to the 30 year rate is that it is usually the lowest interest rate on a mortgage that a person can get. The disadvantage is that the terms on 30 year mortgages are often more strict than those on other mortgages.

Advantages of the 30 Year Mortgage Rate

The biggest advantage to the 30 year mortgage rate is that is usually very easy to get that rate on the average home. Since this is the most common mortgage, lenders have the most experience issuing it.

Another advantage to a 30 year mortgage is that it is easy to compare mortgage rates and terms when shopping for mortgages. Since almost all lenders issue 30 year mortgages, it is easy for a homebuyer to shop around and look at several different mortgages. This way a person can get the best terms and mortgage rate available.

Yet another advantage to a 30 year rate is that the homebuyer will have many mortgage lenders to choose from. By going online a person can make contact with hundreds of lenders that issue these mortgages. With so much competition among mortgage lenders, the borrower should have no trouble getting the best rate possible.

Low Payments

The reason most people take out mortgages with 30 year rates is the low payments that such mortgages ensure. The typical payment on a 30 year mortgage can often be half that of a payment on a 10 year mortgage. This makes homes affordable to many middle and working class people who wouldn’t be able to afford a home with a mortgage with a shorter life.

Disadvantages of 30 Year Mortgages

One disadvantage that homeowners might face with a mortgage with a 30 year rate is the requirement for a larger down payment. Since the lender will be taking the greater risk of issuing a mortgage for a longer period of time with lower payments, they may require a bigger down payment.

Another disadvantage to these mortgages is that lenders are often reluctant to issue these mortgages on structures other than traditional single family homes. The reason for this is that lenders may consider homes such as mobile homes, condominiums and apartments a greater risk than traditional homes. A borrower may not be able to get a thirty year interest rate on such structures.

When to Get a 30 Year Home Mortgage

It is best to get a mortgage with a 30 year rate when you are buying a home that you are planning to stay in for at least a few years. It is also best to get this rate on a structure that will be your primary home. This way you will be able to keep your home payment as low as possible.