| The Corporation for Enterprise Development has | | | | advantage is that people are able to keep payments |
| made a huge announcement by stating the housing | | | | affordable on smaller homes at a time when people |
| market's foreclosure crisis was because of risky loans, | | | | are losing homes. The home owners who want to |
| not because of the borrowers---originally thought to be | | | | build equity at a faster pace should definitely go for the |
| occurring because of a lack of education and | | | | 15 year mortgage, but high monthly payments leave |
| unawareness of the loan risks. The study involved | | | | struggling people short of cash or dipping into savings |
| 260,000 home sales among low-income home owners, | | | | at a time when any type of emergency could |
| involving the 15 or 30 year mortgage interest rate. With | | | | develops. They need to make sure they can make |
| today's economy on the edge, not only low-income | | | | their payments on time. |
| home owners are struggling with mortgages but we | | | | Families or couples with financial issues should always |
| are seeing just as many upper class home owners | | | | buy a home on the 30 year mortgage plan for security |
| losing their mortgages. In today's economy, which | | | | reasons---when you can't pay the mortgage the |
| mortgage would be better? | | | | house is gone. Then if things change and money is not |
| It has always been concluded that mortgage loans | | | | as much of an issue, extra payments can be made |
| should never be paid off too early, which would make | | | | later on. The 30 year mortgage customer receives |
| the 30 year fixed mortgage interest rate the better | | | | larger tax deductions because he will pay more |
| choice. This is a loan that has lower monthly payments | | | | tax-deductible interest in the long run. Alternatively, a |
| and higher fixed interest rates, while building equity | | | | home owner who buys his home on a 15 year plan |
| much slower than the 15 year fixed mortgage rate. But | | | | should first make sure he can afford it while |
| the 30 year fixed mortgage has lower monthly | | | | purchasing other important things---an IRA, a college |
| payments and locked-in unchanging interest at a time | | | | savings or 401 (k) plan while keeping cash reserves at |
| when jobs are scarce and times are rough. A big | | | | the same time he is buying his home. |