I CAN Mortgage

Traditionally, the most common mortgage terms are 15-year and 30-Year Fixed-Rate loans. However, many lenders now offer a wider range of options, including 10-year, 20-year, and even custom terms that can be anywhere in between. Adjustable-Rate mortgages (ARMs) also come with various initial fixed periods, such as 5/1 or 7/1. The availability of specific terms can vary by lender and loan product.

The "best" mortgage term for first-time buyers really depends on their individual financial situation and long-term goals. A 30-Year Fixed-Rate mortgage typically offers lower monthly payments, making homeownership more affordable initially. However, a shorter term like 15 years builds equity faster and results in less interest paid over the life of the loan, though with higher monthly payments. It's crucial to weigh affordability against long-term savings and personal financial comfort.

Generally, the down payment requirement for a custom mortgage term is not inherently larger than for a standard 15-year or 30-year loan. Down payment amounts are primarily determined by the loan-to-value (LTV) ratio, the borrower's creditworthiness, and the specific loan program. While a shorter term might imply a stronger financial position, it doesn't automatically necessitate a higher down payment percentage.

Yes, with certain lenders and loan products, you can absolutely choose your own mortgage term. This flexibility is often a feature of "custom term" or "your way" mortgage programs. Instead of being limited to standard 15 or 30 years, you might be able to select a term like 12, 22, or 28 years, allowing you to align your mortgage with other financial milestones. It's worth discussing these options with a mortgage professional.

Custom mortgage terms can typically apply to both new home purchases and refinancing. Whether you're buying a new property or looking to adjust the terms of an existing mortgage, many lenders offer the flexibility to choose a non-standard term. This allows borrowers to tailor their loan to their specific financial situation, regardless of whether they are entering a new homeownership journey or optimizing their current one.

Yes, you can often refinance without completely "starting over" on your loan term, especially with custom term options. For example, if you've paid into a 30-year mortgage for five years, you could refinance into a 25-year custom term to maintain a similar payoff schedule. This approach allows you to potentially secure a better interest rate or change loan types without extending your repayment period significantly. It's a great way to optimize your mortgage while preserving your equity-building progress.

Absolutely, making extra payments on a standard 30-year loan is an effective way to mimic the benefits of a shorter, custom term. By consistently paying more than your minimum monthly amount, you can significantly reduce the principal balance faster. This strategy leads to substantial savings on interest over the life of the loan and allows you to pay off your mortgage much sooner than the original 30-year schedule.

If you sell your home before your custom mortgage term is complete, the remaining loan balance is typically paid off as part of the sale transaction. The proceeds from the sale are used to cover the outstanding mortgage, and any remaining funds go to you, the seller. There are usually no penalties for early payoff when selling the property, as the loan is simply being satisfied.

Yes, high-net-worth individuals can certainly benefit from custom mortgage terms, as these options offer significant financial flexibility. They might use custom terms to align mortgage payments with specific investment strategies, future liquidity events, or tax planning objectives. This tailored approach allows them to optimize their overall financial portfolio rather than being constrained by standard loan durations.