Who could benefit from a 10 year fixed mortgage?
According the Mortgage Bankers Association, more than 80% of all mortgage applications today are 30 year fixed rate and term mortgages. But anyone who is debt averse or whose primary financial goal is to build equity in their home fast could benefit from a 10 year mortgage. There are websites out there (for example, somewhere like https://www.moneyexpert.com/mortgages/) that can help you choose the best mortgage for you in the long run. However, it all depends on your personal situation as to which loan or mortgage you get, whether it be FHA loans for Bad Credit, conventional mortgage or USDA Rural Housing Loan! .
As you can see from the chart below, the interest charges on a 30 year fixed rate and term mortgage can be five times as much when compared to the typical 10 year fixed rate and term mortgage. Even at today’s ridiculously low rates, the interest savings would be enough to purchase a second home!
Most of the 10 year term mortgages that I have written lately have been for baby boomers taking advantage of the low interest rate environment by reducing their already abbreviated mortgage terms from 15 or 20 year mortgages. As a result there is hardly much difference in the new monthly payments. However, I recently wrote a 10 year mortgage for a 22 year old borrower who simply didn’t want to pay for her home longer than 10 years but she is certainly the exception. We normally find that people with these ambitions have often been doing lots of research into buying a home for the first time. We’ve identified this as being a new generation trend, more and more people are wanting to be debt free rather than those 50 years before us.