Q&A: What would be the best loan option?

Posted on Aug 29, 2012 in FHA Information

Question by That’s what who said?: What would be the best loan option?
I am buying a home. I will put down an offer for $ 65, order visit this 000. I make $ 30, visit this site stuff 000 a year and have $ 19, cost 000 saved up towards the home. I have a credit score of 725. I was planning on getting a 15 yr mortgage, and putting 20% down, basically because I want as little debt as possible. Today, I was talking with someone who recommended putting down as little as possible (FHA 3% even) and taking out a 30 year mortgage. He said I could use the money I would have otherwise spent on the 15yr, 20% down mortgage to invest, thus making more money than i will pay extra in interest. While his thinking made sense, I just can’t be comfortable with that much debt. I am familiar with other forms of investing. He also reminded me most 30yr mortgages let you pay more than your principle. It just seems like a better idea to get the best interest rate possible (about 4.7% for a 15yr, as opposed to 5.1% for a 30 yr). With the 20% down I would also avoid mortgage insurance. I know i CAN afford the 15yr, 20% down payment, but should I go this route? Thank you!

Best answer:

Answer by R. Guetive
Go for the 15 year loan. You actually pay less for the home cuz you’re not paying all that interest.

I wonder if lender’s are making some kind of commission on the loan and that’s why they encourage to take out large loans.

Know better? Leave your own answer in the comments!

4avg.rating 30 votes.

One Comment

  1. Your first choice is the best. The big down payment avoids Mortgage Insurance which saves you a bundle of money every single month. The FHA loan has increased fees, too. That money is all wasted..