Which Mortgage Term Is Best For You? 15, 25 Or 30 Years?

ISLAMORADA, Fla. - Dec. 16, 2016 - PRLog -- Per Jan Keller, Top Producing Real Estate Agent for Coldwell Banker Schmitt Real estate and owner of Kellerporterteam.com. Everything about Real Estate in Islamorada and the Upper Keys,"Just like any other large purchase you should compare and contrast different mortgage products. Home loans can be confusing but this doesn't mean you won't be able to find the right one.

You'll have your choice of applying for a FHA loan, VA loan, conventional, government-insured, as well as Jumbo, adjustable rate, fixed rate, and more options.

First of all, let's start with your income and debt because no matter which type of mortgage loan you ultimately choose, you'll need to be able to afford it. Your mortgage payment, including insurance, and taxes, should be no more than one-quarter or 25 percent of your gross monthly income. For those who are more risk averse, the home loan payment, including taxes and insurance, should not exceed 25 percent of your monthly net, take home pay.

Now, in relation to the term, this is important because it will determine how the amount of your monthly mortgage payment. Obviously, a 15 year term, fixed rate mortgage will have a higher monthly obligation than a 25 or 30 year.

However, this isn't the complete picture. The reason some borrowers choose a 15 year fixed rate home loan is to amortize the debt instrument quicker, will also building equity faster. In addition, 15 year mortgages saves thousands of dollars over the life of the loan.

This doesn't mean a 15 year fixed rate is always the best choice. For instance, if it puts your monthly mortgage payment is over 25 percent of your net or gross monthly income, it's probably wiser to choose a longer term to make it more affordable, like a 25 year or 30 year.

Yet another consideration is your personal situation. For example, if you are employed with the same company for at least three to five years and expect to stay at that same company for many years to come, with your salary rising over time, a 15 year makes more sense.

But, if you are in a less steady situation, making most or a good portion of your income off of commission with a small salary, then reducing your monthly obligation is smart. After all, if you have several strong years, you can always pay more to the principle and when your income drops back to a more normalized level, you can then just pay the regular amount each month.

For more information about Homes for sale in the Upper Florida Keys, please contact Jan at http://www.islamoradajan.com