Tip of the Week

The Impact of Mortgage Term Selection on the Home Buyer’s Future Net Worth

In the current real estate finance mortgage environment, the selection of the 15-year term mortgage compared to the 30-year mortgage may be a wise financial decision for many homebuyers and real estate investors.  Considering that the selection of a 15-year term mortgage has very low investment risk and generates annual rates of return of 6 percent or higher for the first 12 years on the higher monthly mortgage costs, the 15-year term mortgage selection should be considered very attractive to home buyers who expect that their new mortgage holding period will be relatively short.  The 15-year term mortgage should also be considered a very attractive rate of return on investment for individuals who desire a low-risk tax-deferred investment opportunity.