Benefits of a 10-Year Mortgage for Newlywed Couples

A typical mortgage rate includes 15 or 30 years of payments, but you do have other options as you seek out a mortgage. Newlywed couples looking for their first home together could seek out a 10-year mortgage. Along with paying off the house a lot faster, the shorter mortgage term comes with several benefits.

Learn about the benefits of a 10-year mortgage for newlywed couples and how to make the most out of the shorter pay period.

Lower Interest Rates

One of the main benefits is a lower interest rate, especially if you and your spouse agree to a fixed-rate mortgage. With a lower interest rate, your payments will apply more to the mortgage amount as opposed to high interest fees. You also have the option to lower your interest costs with bi-weekly payments.

For example, if you pay your mortgage every two weeks as opposed to every month, you will have an extra payment covered every few months or so. Ultimately, you will drive the money owed on the loan down and could eventually pay off the whole mortgage in even less time than the 10 years.

Current Incomes

As a newlywed couple, you may not have grown your family or considered children yet. You can use the time before you have children to really help expand your income. With both people working, the dual income will help you afford the higher monthly fees associated with the 10-year mortgage. If possible, a person could pick up extra hours and shifts when needed.

You would be better off paying off as much as you can now, as opposed to a longer payment plan with no security for the future. If job status or incomes change in the future, you always have the option to extend your loan to a 15-year or 30-year payment. Start with the 10-year option to pay off as much as you can and lower interest rates for the future.

If you can pay everything off within 10 years, then you will have a lot more financial freedom once the decade ends.

Expanding Family

As newlyweds, you will have a lot of planning for the future, including possible children. If you plan to have one or more children, a 10-year fixed rate mortgage will only help you plan for the future. Once the children arrive and start growing, your household spending will only increase. By finishing off your mortgage payments quickly, you can devote finances to the children.

You have an easier time budgeting for clothes, children's furniture, and backyard items. Once the loan is paid off, a portion of the money you saved could go directly to a child's college account so you can begin saving for their needs in the future. Without a mortgage payment, you will have more room to budget and adapt to a child's needs.

Future Purchases

Along with supporting children, a mortgage that is quickly paid off will help you afford future purchases. For example, if your family does grow, then you can use the financial freedom to purchase a bigger vehicle like a van or SUV. You may want to expand your property, including home additions, pool installations, or other fixtures.

For a 10-year period, your main focus would be on the mortgage payments, but then you will have an open canvas of opportunities. Without the monthly payments to worry about, you have a lot more options and the confidence knowing your home is completely paid off.

For more information on 10-year mortgages and your options available, contact us at Cornerstone Residential Mortgage. We will help you find the right mortgage and lender to help stick with your 10-year plan.