When people speak about mortgages, it is almost always a conversation looking at the differences between a 30 year or a 15-year mortgage. But what about the middle route? According to statistics, in the year 2013, an overwhelming 89 percent of all mortgage borrowers opted for the 30-year mortgage and only 8 percent chose the 15-year mortgage. The survey also found that 3 percent chose an adjustable mortgage rate, while less than 1 percent selected the “other” category – a category that includes the 20-year mortgage option.
The question is why would the 20 year mortgage option be so neglected by borrowers?
I believe it is because 20 years combines the best of a 15 year and a 30-year mortgage option in one. Utilizing the median property price of $190,000 and removing a 20 percent down payment, the loan amount comes out to be approximately $150,000. This article will use the $150,000 figure as an example to compare the different mortgage loan options.
Prodigy Lending is a DBA of AmCap Mortgage, Ltd. (NMLS ID# 129122 – www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/129122), an Equal Housing Lender.
Managing RMLO: Jason Turner (NMLS #286357)