Match Your Money Personality to the Best Mortgage or Refinance Loan

What do your spending habits say about your financial personality? Are you a bigger spender? Are you frugal? Do you remit payments way before they come due. Do you have a propensity for remitting tardy payments? The way an American consumer deals with their finances is a direct correlation whether they are suited for a mortgage or refinance loan and the terms.

Fixed Mortgage Rate For the financial personality the 15-or 30-year mortgage may be a big toss-up. For instance, if a consumer pays their monthly bills on time but expends money on entertainment (dining, movies and shopping), shortening the term of the mortgage loan or refinance loan makes the most money sense. The reason is due in part to the borrower maybe able to earn a higher return on their money by shortening the term with a higher interest rate. As a result, the 15-year mortgage will accumulate equity rapidly and expedite the mortgage loan.

For the mortgage consumer burdened with the financial responsibilities of tuition, car notes and a mélange of other bills and debt, the 30—year fixed mortgage is obviously the best choice. While shortening the term of the loan would accrue equity faster, it would impose financial stress.

As homeownership is associated with many advantages, it possesses many burdens, as well. The pressure and emotional strain of making a monthly mortgage beyond a person’s financial means can incur many problems. Primarily, the cost of defaulting on a mortgage loan is heightened. It exceeds the penalty of neglecting a rent payment. Not to mention, once a consumer’s credit is marred, obtaining future loans and credit cards can incur a hefty interest rate in the area of 23 percent or higher.

Prior to deciding on a mortgage or refinance loan, make sure that you are able to afford and modify your spending habits.