It’s important to note that 30-year fixed mortgages come in many varieties: conforming mortgages, government-backed loans, jumbo mortgages and more. Keep in mind that because the loan term is twice as long as a 15-year mortgage, your monthly payment will be lower for the same amount borrowed over a longer term, but you will pay more in interest over the life of the loan by going with a 30-year mortgage.
The Pros and Cons of a 30-Year Fixed Rate Mortgage
Because 30-year fixed rate mortgages come with lower monthly payments, they are the most popular mortgages in the United States according to Freddie Mac. As with all loans, however, there are pros and cons.
|Enjoy lower monthly payments||Interest rates are higher|
|Deal with less monthly budget stress||It takes longer to build equity|
|It can make expensive property more affordable||It's more expensive overall|
|More payment flexibility as you can pay additional principal amounts when you can afford to.|
|It's easier to qualify|
Larger potential tax deduction for interest
Rates and Trends
Like all types of mortgages, rates and terms on 30-year mortgages are impacted by a variety of factors which include:
- Whether the loan is for purchase or a refinance.
- The location of the property.
- The size of your down payment.
- Whether you are eligible for an FHA or VA loan.
- Your credit score and financial picture.
Mortgage rates have been low as a result of the Fed’s moves in light of the COVID-19 pandemic. The economic turmoil caused by the pandemic has caused many lenders to have tightened their lending criteria as well. For those seeking a 30-year or any type of mortgage it is vital to stay on top of the situation in the mortgage marketplace as a whole and with the various lenders you may be considering. It is likely that the entire mortgage lending arena will remain fluid until this economic turmoil is behind us. This page on our site is a great place to start. You can check the latest rates by type and look at some of the most popular lenders to stay on top of what they have to offer.
Compare our Recommended Lenders for 30-Year Mortgages
|Lender||Minimum Credit Score|
When Is a 30-Year Mortgage Right for You?
If you’re debating as to whether a 30-year mortgage or 15-year mortgage is right for you, here are some things to consider:
- Monthly payment amount: Monthly payments for 30-year mortgages are significantly lower than those of 15-year mortgages—would you be able to afford a higher monthly payment? If not, a 30-year mortgage is better for you. Remember, you can usually pay an extra amount towards principal if you desire, so the 30-year loan can also offer a degree of payment flexibility.
- Cost of your house: A 30-year mortgage usually makes it more financially feasible to buy a more expensive house, since the payment is spread out over such a long time period. To pay off a very expensive house with a 15-year mortgage means you need to be willing and able to make a higher monthly payment.
- Interest rates: 15-year mortgages come with lower interest rates, which means you can save money in the long run. However, you have to go back to the first bullet and ask yourself, even if I’d like to save money through a lower interest rate, can I actually afford higher monthly payments?
- Your income: Will you have a steady income until the loan is paid off? If yes, a 15-year loan is a good option. However, if you’re not sure whether your income will remain steady, a 30-year loan might be a better option, since the monthly payments are lower making it easier to continue paying them even if you’re between jobs.
Our Recommended Lenders for 30-Year Mortgages
AmeriSave Mortgage Corporation is a full-service mortgage lender operating in 49 states and DC. Established in Atlanta in 2002, it has funded 220,000+ homes for a total value of more than $55 billion. AmeriSave is known for offering streamlined online applications with the option of contacting customer support any time you need assistance.
Quicken Loans is one of the most reputable mortgage lenders. It offers a large range of mortgage options including refinance loans, FHA, USDA, VA loans, jumbo loans and more.
You can get pre-approved for a mortgage in minutes with Better mortgage. There are no origination or lender fees, no commission, and no prepayment penalties. Better allows you to lock in your rate and connects you with a single loan officer once you've finished the pre-approval process.
How to Apply for a 30-Year Mortgage?
When applying for a 30-year mortgage from any of the above companies, you’ll find that though the process can seem nerve-wracking, it’s generally pretty straightforward. If you’re serious about getting a mortgage, most of these sites offer quotes and possible pre-qualification in a matter of minutes, so all you need to be prepared to do is enter the following information:
- Name, date of birth
- Address, phone number, email address
- Location of house you want to buy, cost, how much down payment you can put down
- Credit score
Once you pre-qualify, you’ll then be asked to submit or upload further documents:
- Proof of income
- Proof of assets
- Cosigner if necessary
- Disclosure of debts
- Various tax paperwork
While some applications can be completed online, you can always speak to a loan officer from the online lender for help and guidance. Note that the items listed above are only a guide, the lender you are considering may ask for additional documents or verifications based upon your unique situation or their specific requirements. Note these requirements may be subject to change based on how the economy continues to evolve in the wake of the COVID-19 situation.