Taking out a mortgage loan is a major life decision and one that should only be taken after much consideration. Being informed about it will help you a lot to decide whether the loan is suitable for your financial situation. To give you peace of mind, having a home loan has gotten a bit easier over the last few years.
Today, it earned the description of being convenient. But why?
Ahead, we list down reasons why a home loan is more useful and handy now than before.
It is more affordable.
It’s undeniable: buying a home in cold cash is simply impossible for some of us. This is where the mortgage comes to the scene. With its ability to divide a large payment into smaller chunks of repayments, a mortgage loan makes this debt more manageable and affordable.
However, a mortgage can be divided into two types, depending on its terms: 15-Year Mortgage and 30-Year Mortgage.
To start, a 15 Year Mortgage can help you pay off the loan faster. If you want to finish mortgage payments as soon as possible, this is the best route for you. It also saves your money on interest. Without the fear of increasing rates, the shorter-term provides all the ideal repayment route, but it is important that you are sure you can sustain the higher monthly cost.
On the other hand, a 30-Year Mortgage loan will lower your monthly payment. Usually, a longer-term loan will offer you the comfort that you can pay back on a monthly basis. It gives you as well a little more wiggle room when it comes to saving.
As a longer-term mortgage is indeed repaid little by little on a monthly basis, your monthly repayments can be much lower than the rent you would pay in some area.
Lastly, most mortgage loans offer generally lower interest rates than other types of credit. It is cost-effective when it comes to borrowing.
Applying can be a quick process.
Majority of the mortgage lenders give a brief and quick response to applicants. Most lenders already established their standards when it comes to approving applications. A quick turnaround, no matter the decision— will help you apply for more lenders and even help you find better deals.
Plus, home shopping is pretty convenient due to the use of the Internet. Applying for a mortgage can be done with just a click. From inquiring and follow-ups, online mortgage lenders really step up their game and make life easier for their applicants.
Most mortgage lenders as well ease their lending guidelines to expand home loan to more people. Compared to the cutthroat scene of home-hunting the past decade, it has more leeway to all types of borrowers.
You have plenty of different loans to choose from.
Thankfully, mortgage loans provide different options to homebuyers. If you are unsure about your choices and can't find a home loan perfect for your situation, all you need to do is research about the mortgage options available in your area. You have far more options than you realize.
Also, in this modern time, information is easily available at all times. Simply look for varied types of loans. Start shopping for a home loan here with loanDepot. As it’s one of the leading online mortgage lenders, it offers a wide array of mortgage loans you can choose from.
You can build equity at the same time.
Owning a home is an investment. Although you are repaying on a monthly basis, it builds valuable equity at the very least. This equity is the difference between what you owe on a mortgage loan and what your residence is worth.
You can use equity as a source of funds by taking it in the form of a home equity loan or line of credit. It is also useful when obtaining a second mortgage to pay for other expenditures and investments.
Coupled with lower interest rates than other kinds of loans, this is a surefire way to save money in the long run.
Home loan offers a tax break, too.
That’s right. A mortgage can be conveniently a significant tax break for you.
Mortgage interest, including points and real estate taxes are deductible, which reduces your taxable income. By paying an additional percentage of your loan upfront with the effort to lower the interest rate, you can also deduct their purchase price.