Housing Loan: Short Term vs. Long Term
If you’re purchasing a house through a loan, or if you plan to mortgage your home, you have the option of paying it off within a short period of time or a long period of time. So which will you choose?
That depends on your needs and financial capacity.
Go short term if you have enough to feed your family and do your everyday necessities after you have paid off your amortization for the month.
Advantages: lower interest, ownership immediate.
Disadvantage: initial cash outlay is abruptly bigger.
Go long term if you want to invest but you are financially limited but still would be capable if you choose the long term scheme.
Advantages: monthly investment not heavy on the pocket; when you die earlier than the house is paid for, it is considered paid as long as you have morgage redemption insurance (MRI).
Disadvantage: Higher interest rate.