Mortgage calculator

[mamahearts]

I was playing with the mortgage calculator to see what the interest payments are on a 30 yr FHA vs a 20 year and holy buckets it's a huge difference.  Is it harder to qualify for a 20 year mortgage or does it just mean our payments will be higher? 

[MBOhio2]

A 20 year mortgage means that you will be paying off your house 10 years faster, so yes, the payments are going to be significantly higher.

From my understanding, it's not more difficult to apply for a 20 year mortgage but, because the mortgage payments are higher, you must have more room in your DTI for the larger payments. Also, because you are agreeing to pay the lender back quicker, 20 year and 15 year mortgages usually come with lower interest rates.

[mamahearts]

That sounds awesome.  I will have to check our DTI again but we should be able to swing that.  Thanks for your information!

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@MBOhio2 wrote:

A 20 year mortgage means that you will be paying off your house 10 years faster, so yes, the payments are going to be significantly higher.

From my understanding, it's not more difficult to apply for a 20 year mortgage but, because the mortgage payments are higher, you must have more room in your DTI for the larger payments. Also, because you are agreeing to pay the lender back quicker, 20 year and 15 year mortgages usually come with lower interest rates.

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[BrianB_The_Loan_Professor]

if the rate difference isnt huge you may be better off going with the 30 and using the calculator to determine how much extra to add to the loan to pay it off in 20. That way if something comes up or things get tight you can go back to the lower payment.

Some banks the 20 looks more like the 30 others it is closer to the 15....

it is kind of the odd duck as far as terms go

B