Submitted November 18, 2013
I thought mortgages had to be 30 years long, but I’ve heard of 10-year and 15-year mortgages. What are the advantages and disadvantages of shorter timeframes?
Two advantages. The first being you pay off your house faster, the second is that shorter term loans generally have lower interest rates than 30 year mortgages.
Disadvantages of a shorter term loan is a higher payment that what a 30 yr loan requires if you can afford the higher payment for a 10 or 15 yr fixed easily - this is definitely the best option to use. If the higher payment makes you nervous or doesn't fit the budget - use a 30 yr fixed and just make additional principal payments if you can