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Lindsey Smith's Blog

By Lindsey Smith | Both Buyer and Seller in Caldwell County, TX

Advantages and Disadvantages of Long-Term Home Loans

Do you want to invest in a Holmdel real estate property or Holmdel homes for sale but you lack funding for it? Well, there are loans you can consider applying for and some of them are payable within 20 years or so. These long term loans seem to be a good deal for most home buyers but you have to know that there are advantage and disadvantages when you get this kind of loan.


A long term mortgage can be very handy under some circumstances. For instance, if you are planning on buying property with the intent to renovate it and then resell it, this type of loan would actually allow you to minimize your own expenses and monthly payments while you are fixing it up. Another situation would be when buying a rental property. While you have renters in, you pay extra on your monthly payments, and in those in-between renter occasions, you just make the low regular payment. This type of loan also could allow you to get a larger house than you could otherwise afford. 


A long term mortgage can work against you, too. The added interest has already been mentioned. Another major consideration, though, should be the value of the house itself. Forty or fifty years down the road, what will the house be worth? Or, what will the economy be like - or your health? While these are some "ifs", and unknowable, it still should take up a moment or two of your thinking process. A short term mortgage lessens the risks simply because it is shorter. It also could free up money at the end of the mortgage term to use in more creative - or needed ways when you reach that stage of life.

If you should decide to go with a long term mortgage, be sure to compare it to several other offers. This gives you a degree of flexibility as well as the opportunity to choose the best offer. Also, be sure that there are no early payment penalties so that you could pay it off early if you are able.


Fortunata Siciliani is an expert in the real estate business and a trusted online writer. To know more info about Holmdel homes for sale and Holmdel real estate, visit our listings on our website.

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