Deciding between a ten (10) year mortgage and a twenty (20) year mortgage can be a difficult thing. First off, if you choose the ten year mortgage your monthly is much higher, but you will not end up paying them half as much. You can save a lot of money, for many though it really is a matter of timing. If you have a good stable income and kids that are very young you might want to go with the 10 year option. While if you have teenagers and the bills are bigger than it can be a lot easier to go with the lower monthly even thought it will cost more in the end. There are many things that could affect your children’s and financial future and deciding between a ten year mortgage and a twenty is one of them.
The effect of a 10 year mortgage on your Child’s or your financial future can be a very powerful factor. A good college can cost 120,000 for a full ride, and that is a lot of money to come up with and if middle class family desires to put their kid or kids through a ride like that for four years then they have to have correct financial saving techniques and surprisingly the best way to save it so have the right mortgage plan. The difference between a 20 year mortgage and a ten year mortgage means the difference between a great education and not.
If you buy a house when your kids are just beginning and are very young you get a ten year mortgage, you can pay his/her education using a 20 year mortgage play and the difference in interest. If you buy a 300,000 house at a 5 % you will pay $150,000 in interest, which is your children education and when your house is paid off in ten years then he/she will be ten years of age. After that you will have paid 450,000 for a very nice house but it, you take the same schedule and set up a twenty year mortgage for yourself then you will have enough to put them through a very nice college. If you pay off your mortgage on a $300,000 at a 5% interest rate, the price is double the price of your house and pay $600,000 in total. If you continue saving on the 10 year mortgage you will have $150,000 saved that didn’t go into twenty year mortgage, and then you get to spend that on his/her education.
You will be able to put them through a very expensive college which will offer them the most out of life and get them secured in their future. If you save as if you were going to pay a twenty year mortgage then when your child is twenty they will be in a very nice college. Due to your forward thinking and saving the same way to pay for your house and took it out of the monthly as if it was going to interest but only half of it actually did because the other half didn’t get paid to the mortgage company and was saved. You saved $150,000 by buying your house in ten year and not 20, or it would be a totally different story. Even if you aren’t buying a $300,000 house you can still save as if you were and then just pay off their education or help pay their way into a more expensive school while they get some kind of scholarship. Either way it is a way to use the mortgage to either pay or help pay for your child’s education.