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The 30-year fixed-rate mortgage loan is the most popular financing option among home buyers in Washington State. It’s more widely used than the 15-year fixed, the 5-year adjustable, and all other types of home loans. But why?
This type of mortgage loan has a fixed interest rate and a repayment term of 30 years. It is the most commonly used of all the different home loan types, and we’ll look at the reasons why in a moment.
One of the key features of this product is the fixed interest rate. When you use a 30-year fixed home loan to buy a house in Washington State, it will carry the same mortgage rate for the full 30-year term — or until you sell or refinance.
This is an important distinction because some types of loans have an interest rate that can change or “adjust” over time. But the 30-year fixed-rate mortgage stays true to its name by remaining unchanged for the full repayment term. The question is, why do so many buyers favor this type of mortgage product? What are the perks of a 30-year fixed-rate mortgage that make it so popular?
Related: How Mortgage Requirements Have Eased for Home Buyers in Washington
The 30-year fixed is the most popular mortgage option among Washington State home buyers, and for several reasons.
Here are the primary benefits.
Those are the benefits. But there are some drawbacks as well, including the following:
Higher interest rate: One of the downsides to using a 30-year loan is that you might pay for that long-term stability in the form of a higher interest rate. On average, the interest rates assigned to 30-year loans tend to be higher than those assigned to shorter-term mortgage loans.
More interest paid overall: Since a 30-year fixed-rate mortgage is paid off in a much longer time frame than shorter-term mortgages, more interest will be paid over the long run. Rather than paying off your mortgage off earlier with a shorter-term mortgage and therefore saving on interest, a longer-term mortgage like a 30-year mortgage will mean more interest paid overall.
Of course, many people who use 30-year fixed-rate loans sell or refinance their homes long before 30 years. So this might not be a major drawback in all scenarios.
Having said all that, 30-year fixed-rate mortgages tend to be more popular simply because they’re easier to manage for many consumers. The fact that the loan payments are much lower compared to shorter-term mortgages makes these types of home loan products much more attractive. Considering all the other debt that consumers need to pay for every month, having a smaller mortgage payment to deal with makes financing a lot easier.
If you are ready to apply for a home loan in WA or just have questions about mortgages, call Sammamish Mortgage. We have been offering home loans to home buyers across Washington State, Idaho, Colorado, and Oregon since 1992, and we’d love to help you too. We are proud to offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have any questions or are ready to apply for a home loan.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.