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Coming up with the down payment on a home can be hard enough, and one way to make a home more affordable is to spread out the mortgage payments over 30 years.

But 30 years can be daunting, and that time can be cut down with a 15-year mortgage. Its a lot more expensive in the short-term than a 30-year fixed-rate mortgage, but pays off through greater long-term savings.

Here are some things to consider when weighing a 15-year vs. 30-year mortgage:

Saving Money
It can be difficult to see the long-term benefits when looking at a monthly mortgage bill that will be 50 percent higher over 15 years instead of 30.

Paying a home loan off in half the time requires a larger payment, of course, but it can save you tens of thousands of dollars in interest charges. Why? Not only is more principal paid earlier, but interest rates on 15-year mortgages are usually better than other loans types.

Heres an example of a $200,000 mortgage at 30 vs. 15 years:

Mortgage type: 30-year 15-year
Interest rate: 4.5 percent 4 percent
Monthly payment: $1,013 $1,479
Total interest: $164,813 $66,288

Thats almost a savings of $100,000 by going with a 15-year loan. Divide that savings over 15 years and its about $555 saved per month.

Borrowers should make sure they have enough income to afford it, are able to manage their household debt and have money in liquid savings for emergencies.

Building Equity
Repaying a mortgage faster not only saves you money in the long run, but you build equity in your home faster, too. If home prices rise, your equity could grow as well.

This is good for many reasons, including making refinancing easier by lowering your debt-to-income ratio. While it wont improve your cash flow, it should make it easier to get approved for a home equity loan or home equity line of credit.

An Easier Retirement
Another big advantageif you plan to retire in the next 10 to 20 years, you won’t have to worry about mortgage payments during your retirement. Instead of a house payment, you can use that money for retirement expenses.

If you continue paying a 30-year mortgage into retirement, you may have to pull money out of your savings to make the payments.

Published with permission from RISMedia.

Thinking about adding a home security system?

Criminals are less likely to target homes with built-in security, so installing one could protect your family and valuables.

Safety isnt the only benefit, though.

Some systems let you control them remotely, allowing you to unlock the door for visitors and keep an eye on your kids from work.

Security features could also be an attractive selling point if you put your house on the market.

You might even get rewarded with cheaper homeowners insurance, meaning the system could help pay for itself.

For peace of mind and financial gains, consider a home security system.

Published with permission from RISMedia.

If youre buying a home, you’ll more than likely be obtaining a mortgage, which you may not know much about. In fact, unless youve been involved in a home sale before, there are many things you will be learning about for the first time.

Here is a handy list of some of the key terms that every person involved in a real estate transaction should understand.

Appraisal:The written analysis of the estimated value of a property, as prepared by a qualified appraiser, which often determines if you will qualify for the loan.

Closing:One of the last steps of any sale. This is the meeting where the lender, buyer and seller complete the sale and mortgage process. Once the home closes, the home officially belongs to the new buyer.

Closing costs:This term refers to the money paid at closing to the lender and consists of a loan origination fee, points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. Closing costs usually average between 2 – 6 percent of the total mortgage amount.

Credit report:Simply a report of your credit history that a lender will use to determine if you are a good risk for a loan.

Interest-only mortgage: A loan whereby you only pay the interest portion of the mortgage payment each month.

Interest rate:The annual interest on a loan. The lower your interest rate, the lower your monthly payment will be.

Lock-in:The lenders guarantee that you will be granted a certain interest rate for a specific time period, such as 30 days before closing.

Origination fee:The fee charged by a lender for processing a loan.

Points:The amount that can be paid to a lender to lower the interest rate on your loan at closing. Each point is equal to 1 percent of the loan amount.

Private mortgage insurance (PMI):For those buyers who put less than 20 percent down on a home, lenders will require you to take out PMI, which is then added to your monthly mortgage payment. This protects the lender in the event that you default on the loan.

Title:The home document that proves ownership of the property.

Published with permission from RISMedia.

Published with permission from RISMedia.

Many people dream of owning a home, but it can be difficult to save enough money for a down payment and closing costs. Fortunately, federal, state and local governments offer a variety of programs to help people purchase their first home.

Federal Programs
The Federal Housing Administration (FHA) offers insured loans, which means that the lender will not lose money if the borrower defaults on the loan. FHA loans offer smaller down payments and lower closing costs than other types of loans and have competitive interest rates. Down payment requirements depend on the borrowers credit score.

The Department of Housing and Urban Development (HUD) sponsors the Good Neighbor Next Door program, which helps police officers, firefighters, emergency medical technicians and teachers buy homes. In regions designated as “revitalization areas,” buyers can receive a significant discount on the purchase price, as long as they agree to live in the house for at least three years.

The United States Department of Agriculture (USDA) also offers assistance to homebuyers. The USDA guarantees loans for homes in rural areas. The properties do not need to be used as farms. Income limits and down payment requirements vary.

Fannie Mae and Freddie Mac are entities sponsored by the federal government that offer loans to people with low- and moderate-incomes through local lenders. The loans are offered with low down payments and competitive interest rates.

Assistance for Veterans
The Department of Veterans Affairs (VA) offers home-buying assistance for active-duty members of the military, veterans and surviving spouses. The VA partially guarantees the loans and offers them with no down payment, no minimum credit score, no private mortgage insurance and competitive interest rates.

The VA also offers the Native American Veteran Direct Loan. The program helps Native American veterans and their spouses purchase houses located on federal trust lands. These loans do not require down payments or private mortgage insurance and come with low closing costs and fixed rates for 30 years.

Help With Home Improvements
Many people would like to make their homes more energy efficient to reduce their long-term energy costs. The Energy-Efficient Mortgage program allows buyers to make upgrades to improve energy efficiency without raising their down payments. The loans are insured through the FHA or VA.

Some first-time homebuyers look for inexpensive fixer-uppers. The Section 203(k) rehabilitation program, which is backed by the FHA, allows buyers to borrow money to make improvements and includes the costs in the total value of the mortgage.

Other Programs
Many states and cities also offer programs designed to help first-time homebuyers. You can learn about these programs by visiting your state or local governments website or talking to a local real estate agent or a HUD-approved housing counseling agency.

Research Available Options
Buying a first home can seem daunting, but it doesnt have to be. Several programs are available to help first-time buyers in a variety of circumstances. Explore your options to get help so you can be on the road to buying the home of your dreams.

Published with permission from RISMedia.