Discussions of mortgages often focus on interest rates, but there is a much more basic decision to make. Should you go with a 30 year mortgage term or a 15 year mortgage term?

30 Year vs. 15-year-fixed rate mortgage

Two points abotu mortgage are often brought up by people during discussions about mortgage. How can you qualify for the most money with the lowest payment? What is the best way to get the lowest rate for a mortgage? While these are two important issues, there is an addition one that people fail to consider, resulting in significant wasted money.

The term of a mortgage is extremely critical for a couple of reason. First, it dictates the length of the mortgage term you are borrowing. Second, it determines the amount of interest you will pay over the course of the mortgage. These are important issues when it comes to building equity.

The longer the loan, the more total interest you are going to pay. The trade off, of course, is you are going to have smaller monthly payments the farther you stretch out the obligation. Initially this could look like the right goal, but it can cause you heartache in the long run.

Looking at the interest charge, the public thinks that it is the only way to save money. This is an ok approach, but you can save more money by changing the term. If you can shorten the mortgage period by half, you would be about to save a large amount of money on the interest payments.

The decision on the term of the loan is relatively simple, but entirely dependent upon your personal situation. There is no absolutely correct choice. First, you need to determine if you can comfortably afford the higher payments that come with a shorter term loan. In general, payments on a 15 year mortgage loan will be 20-25% higher than a 30 year mortgage. Of course, you will pay the loan off faster, to wit, be building equity in the home quicker.

The modern mortgage industry has a variety of different term length products. When applying for a loan, take the time to evaluate the different terms to see if you can find a loan that is perfect for your situation.

This article was written with the help of the staff at Los Angeles Mortgage and Chicago Mortgage . For a more in depth discussion about this topic or other related topics please visit the mortgage forum.