The 30 year fixed mortgage is the most common type of mortgage. To determine if the 30 year fixed mortgage is the right type for you, you need to consider several things. First you must analyze your finances.

The first fact to consider is the length of the mortgage. You will be making payments for 360 months - an extremely long time. Can you be reasonably certain your income will remain constant or increase over the next thirty years? Are you young enough that you will be employed for that long? If the answer is no, then where will the funding come from to make your payments on time?

You should consider the interest rate. Interest rates on mortgages increase & decrease depending on the economy. When you sign 30 year loan, you will make the same payments regardless of interest rate changes.

Is there any flexibility with a 30 year mortgage? Yes - and this represents a big advantage. If you obtain a 30 year mortgage, you can apply additional funds towards the principal any time you wish (some loans have pre-payment penalties so investigate your mortgage very carefully). If you pay toward principal regularly, you can pay off your 30 year loan in only 20 years!

You are not obligated to pay any more than your regular fixed monthly payment. If you are faced with an expensive repair or other unforeseen expense, you can pay only the minimum amount. If you win the lottery or receive an inheritance, you can apply toward mortgage principal as much as you want.

How much can you benefit from applying additional funds towards mortgage principal on a 30 year fixed mortgage? Here are some examples:

If you finance $100,000 on a home with a fixed rate 30 year mortgage, the payments would be $665/month if the interest rate is fixed at 7%. Multiply 665 x 360 (the number of payments). You would pay the lender a total of $239,400 over the life of the 30 year mortgage. The payoff date would be thirty years from initiation.

By adding only $100 each month to you payment, you would own your home free and clear about 9 years and 6 months sooner!

Better still, if you were able to add $200 each month towards principal, your thirty year mortgage would be paid off in 16 years and 1 month! And you would save $73,000!

You could make extra payments toward the principal, and have the flexibility of not making extra payments. This is a terrific advantage over financing for a shorter period. The shorter loan would mean you would be required to make larger payments every month.

A $100,000 loan financed over 15 years at 7% would mean you would pay $898.83 each month. Can you see the advantage of financing over a 30 year period!

Unless you are 100% certain of your ability to make the larger payments for a shorter mortgage, then a 30 year mortgage may be your best option.

What if interest rates decrease significantly during the life of your mortgage? Refinancing would be the answer.

Careful study before obtaining any type of mortgage is critical. In the instance of the 30 year mortgage, you can plan in several beneficial options without obligating yourself to pay a higher amount. Begin your mortgage research by studying the advantages provided by the fixed 30 year mortgage before taking into consideration a shorter mortgage.