For years, the 30 year mortgage has been the traditional home financing option for many Americans. While the 30 year fixed rate mortgage does have its benefits, more and more homeowners are considering shorter-term loans for different, and sometimes more financially beneficial) reasons. Here's a quick look at some of the major benefits of applying for a 15 year mortgage:

1. Low Rates

One of the first questions a homebuyer asks when shopping for a mortgage program is "how much interest am I going to have to pay?" While interest rates fluctuate, a 15 year mortgage will typically have a significantly lower interest rate than that of its traditional counterpart, the 30 year mortgage.

2. A Popular Choice For Refinancing

For those who are considering refinancing in order to take advantage of historically low interest rates, the 15 year mortgage is a wise choice, and can even allow homeowners to keep the same (or close to the same) mortgage payment.

3. Pay More Toward Principal

Most people associate short-term mortgages with low interest rates and high principal payments. If you can afford to pay a little more every month, this isn't a bad choice. Paying more toward your principal balance means your home can be paid off much sooner than it would if you were in a traditional 30 year loan.

It should also be noted that while 15 year mortgages often require higher monthly payments, this is not always the case. As mentioned above, if interest rates are significantly lower nationally, some people may be able to keep their monthly payments the same, since the amount they were paying before was calculated using a much higher interest rate.

4. Pay Less in Total Interest

Since 15 year mortgages carry much lower interest rates, you will be saving yourself a big chunk of money in the long haul. Sure, you may have to pay more every month, but remember that most of that payment is going toward your principal balance. The money you are saving on interest could be socked away in a savings account or could go toward upgrading your house so you'll be better prepared for putting it on the market when the time comes.

5. The 30 Year Mortgage Might Not Suit the Modern Homeowner

Even though most people naturally lean toward a 30 year fixed rate mortgage, it wasn't always the popular choice. In fact, before the Great Depression, the 30 year mortgage didn't even exist at all. The 30 year mortgage came about after the housing market crash of the 1930s because that is approximately how long people stayed in their homes, living through their earning years and then into retirement. More recently, most people do not live in the same house for more than 10 years but oddly enough, the 30 year loan is still considered the most popular.

While the 30 year mortgage does have its own set of benefits, anyone who is able to afford a slightly higher monthly payment and wants to pay off their home sooner, should give some thought to the 15 year home loan.

More good news for the real estate industry - builder confidence for newly built, single-family homes increased this month, as shown on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI was released on the 18th and showed a four-point increase in builder confidence, raising the total to 18. According to a press release by the National Association of Home Builders, "this is the largest one-month gain the index has seen since the home buyer tax credit program helped spur the market in April of 2010."

Every month for the past 20 years, the NAHB/Wells Fargo Housing Market Index has conducted a survey that evaluates builders' perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to estimate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores from each of these three components are then used to calculate a seasonally adjusted index.

Although this is considered quite a significant boost, the NAHB still maintain that challenges lay ahead.

"This latest boost in builder confidence is a good sign that some pockets of recovery are starting to emerge across the country as extremely favorable interest rates and prices catch consumers' attention," said NAHB Chief Economist David Crowe. "However, it's worth noting that while some builders have shifted their assessment of market conditions from 'poor' to 'fair,' relatively few have shifted their assessments from 'fair' to 'good.' One reason is that builders are facing downward pricing pressures from foreclosed homes at the same time that building materials costs are rising, and this is further squeezing already tight margins."

For those in the industry, any step in the right direction is a small victory - a hopeful sign of more favorable times to come. To read more follow this link: http://www.nahb.org/news_details.aspx?sectionID=134&newsID=13717

Home > Blog > Home Sales Drop In September

The housing market saw a healthy increase in existing-home sales this past August. Unfortunately, September's numbers weren't as strong. The good news is, that number was still higher than it was a year ago, according to the National Association of Realtors(R).

Existing-home sales are completed transactions on existing homes that include single-family, townhomes, condos and co-ops. While total existing-home sales dropped from 5.06 million in August to 4.91 million in September, the market is still ahead of the 4.41 million count from September 2010. Additionally, foreclosures and distressed property sales have also decreased, from 31% in August and 35% in 2010 to 30% in September of this year. Market professionals say that while the current state of real estate is gaining stability, there is still room for improvement.

This overall decline has been partially attributed to contract failures, which are mortgage cancellations caused by declined applications, failures in loan underwriting, or other problems including home inspections and loss of employment. This goes to show how important it can be have a valuable network of real estate professionals on your side when purchasing a home. From hiring a knowledgeable real estate agent to working with an experienced, licensed lending consultant, it's important to make sure you have professionals by your side. This will help ensure that these contract failures are avoided. While even the best mortgage lenders can't foresee many of life's obstacles - such as losing a job or becoming sick or injured - it is crucial to have a team who will work hard to avoid these contract failures.

To read the entire report, follow this link: http://www.realtor.org/press_room/news_releases/2011/10/ehs_sept

One of the biggest benefits of FHA 203K loans is that borrowers can obtain a single loan at a long term fixed or adjustable rate. This financing option encompasses both the purchase of the residence and the funds needed for the rehab construction. The amount of the mortgage is calculated based upon the estimated value of the home once the work has been completed. Sound a little confusing? The mortgage professionals at American Financial Resources are well versed in 203(k) streamline financing and can help guide you through the process. Call us today at 800-316-9508 for a free, no obligation consultation