Deciding on the right home loan is an important process when you are purchasing a new home. Perhaps surprisingly, there are quite a few options to choose from. Along with traditional loans, which see you pay both principal and interest, interest only options are also available.
To help you determine which loan is the right one for you, talk it over with your Door agent. Deciding between interest only versus principal and interest loans is crucial. Here is some information you will want to keep in mind.
Comparing Home Loan Options In Dallas
Principal and Interest Loans
One of the best things about a principal and interest loan is that you do not have to worry about a balloon payment at the end of your loan term. You will also be able to budget easily because you will have a set payment each month.
A downside to principal and interest loans is that they do take quite a bit of time to pay off. Depending on the length of the loan, you can expect to spend 15 to 30 years paying off your home.
Interest Only Loans
With an interest only loan, you will only be required to pay a certain portion of the interest with each monthly payment. This could help make your payment lower each month, which can allow you to pay more towards the principal and pay off your loan faster.
One of the downsides of this type of loan is they are typically shorter than a traditional loan. If you aren't able to pay the amount in full, you will be left with a balloon payment at the end of your loan.
Both of these loan options should be considered carefully. Together with this information and the help of Door’s home broker team in Dallas, you will be able to weigh both of your options carefully and make the best decision. To learn even more about these loan types, be sure to contact Door today.
Learn more about loans and the benefits of pre-qualifying for a home loan here.