Financial Freedom Help Blog

If you are in the market for a new mortgage loan, the term length you choose is an important aspect to consider. The length you choose along with the interest rate determines your monthly payment amount. Is a mortgage with a longer term better? The answer to this question depends on your current financial situation and your long term goals. Here are several tips to help you choose the right mortgage.

Choosing the right mortgage term depends on a number of factors including your monthly budget. If you don’t have a budget you need to prepare one before thinking about a mortgage loan. How much can you afford? Do you need a mortgage with the lowest monthly payment amount possible, or is your goal to pay off your debts as quickly as possible? Depending on what these goals are and your cash flow situation, you will be able to determine which term length is best for you.

The hassle of making two monthly mortgage payments has prompted many homeowners to consider refinancing their 1st and 2nd mortgages into one loan. While combining both loans into one mortgage is convenient, and may save you money, homeowners should carefully weigh the risks and advantages before choosing to refinance their mortgages.

Benefits Associated with Combining 1st and 2nd Mortgages

Mortgage Refinance

Aside from consolidating your mortgages and making one monthly payment, a mortgage consolidation may lower your monthly payments to mortgage lenders. If you acquired your 1st or 2nd mortgage before home loan rates began to decline, you are likely paying an interest rate that is at least two points above current market rates. If so, a refinancing will greatly benefit you. By refinancing both mortgages with a low interest rate, you may save hundreds on your monthly mortgage payment.