While visiting the credit union, you are going to find that there are lower interest rates available for borrowers on their mortgage loans. For many people, these lower interest rates can help a 15 year loan with a fixed rate be incredibly affordable and that can ensure your residence is paid off faster.
Take for example you have found a home that you need to borrow $100,000 after you have made a down payment. On this loan, you have a standard 5.38% interest rate. Your payment which will include principle and interest will be $811 each month and you will be able to quickly pay off the loan faster and build equity more quickly in your home.
If you raise the interest rate on that to 6% and extend the loan to 30 years, a monthly loan on the same property will be $600 each month. The term is of course longer and you do save a couple of hundred dollars each month. While it initially appears you are saving some money in the long run what would have been $45,931 paid in interest has now jumped by about $70,000 and the interest paid is $115,838. This astronomical amount could have been avoided, had you stuck to the 15 year loan and made payments on time.
When you are speaking to your loan office at the credit union, consider exploring the possibilities of a short term loan. If you can pay a few hundred dollars each month comfortably, you can reduce the headaches of having a mortgage payment that will be due for the next 30 years and you can save money that can be put into a retirement account through your credit union, rather than using it to pay off interest. That will give you a home you can enjoy and some peace of mind for your financial future.