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How many of you have paid your home off? Good for you! The rest of us have a house mortgage that is probably the number one biggest payment (that is, if we’ve gotten rid of the pesky school loan and the credit cards!)
Even though this seems like a hard time to be in the market to buy a house (or at least to sell a house) it’s important to know how you will finance it once you find the house of your dreams.
The first time Virtuous Blonde and I bought a house (the one we are currently living in) we went with an FHA loan that let us get by with contributing very little to closing costs. This time around we’re still looking at Fixed Rate Mortgages because we’re concerned about what’s happening with people that have Adjustable Rate Mortgages and we don’t believe that we can have the luxury to gamble that we’ll be out of our next home in five years.
Right now we have a 30-year mortgage, which we’re paying bi-weekly payments (though we’re no longer doing that automatically, we’re doing it through our budget). We’ve been looking into 15-year loans, however, because they significantly lower the interest that you will pay the bank, and they are paid off sooner.
The only problem with them, that I’ve heard, is that the average mortgage lasts 7 years– meaning that people are usually out of their house in 7 years, not 15. To tell you the truth, when we find our next house we don’t know how long the Lord will keep us there. So we need to keep our options open.
Of course, if I were younger or had it to do over again, I might have purchased a two-family and rented out one half to get the mortgage down, or saved up and paid cash– definitely the best way to go.
What kind of mortgage do you have and how long until you get out?
I have a fixed mortgage on my house for 15 years and quite concerned about paying off after reading your post.
Adam
http://www.perfectmortgagelender.com/
Posted by Adam | March 17, 2008, 1:33 amWe’re in a 30 year fixed, but are thinking we’ll have it paid off in five to seven years. My husban’d amazing with finances!
AG’s last blog post..Mary
Posted by AG | March 17, 2008, 2:08 amThat would be a really good thing if you could get it paid off that quickly. I think that we could do less than 5 years if we weren’t interested in moving and we didn’t take any vacations.
Posted by MInTheGap | March 17, 2008, 12:42 pmDepending on your circumstances here in the UK the flexible mortgage is becoming more popular and adaptable. As you now increase your payments and the loan gets paid off mush much quicker.
Posted by Dave Pulsford | April 20, 2008, 7:02 amThere are different types of mortgage in the UK and it depends on what your circumstances are and what you can afford to pay (and how long you want to pay). I got a capped rate which the interest can go up and down but never over a certain level which is great for me.
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Posted by mortgage free | March 2, 2010, 10:56 amI had a 30 year mortgage on my house. Lived in it for 10 years before I sold it. I think the fixed rate loans are the way to go – especially with mortgage rates near record lows. The next loan I get will likely be a 15 year loan. I make more money now and can afford to pay a little more each month (so I can save a ton on loan interest).
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Posted by Home loan modification | March 17, 2010, 12:07 am