Netter Real Estate Inc
Richard Bocchieri, Netter Real Estate IncPhone: (631) 848-0748
Email: [email protected]

Understanding the term of a mortgage

by Richard Bocchieri 10/03/2024

A major aspect of financing a home is choosing the “term” of a mortgage. But what exactly are mortgage terms? While terms vary by mortgage lender, many are shared across the board. The more you know about the terms of a mortgage, the better prepared you’ll be to pay it back.

What is a mortgage “term”?

In a mortgage, you can consider the term to be the lifetime of a loan. A term is defined as the period of time your mortgage contract lasts. This also means the amount of time you have to pay back the entirety of the loan. 

What are some common mortgage terms?

Every mortgage is a bit different, but there are some common terms many mortgage lenders share. One key factor is the type of mortgage: either fixed rate mortgages or adjustable rate mortgages. These different types of mortgages typically have different terms.

Fixed rate mortgage terms

A fixed rate mortgage is the most common type of home loan in the United States. These mortgages are long-lasting, often with a term of 30 years. Some fixed rate mortgages have terms as low as 10 years, but come with much higher monthly payments.

Adjustable rate mortgage terms

Adjustable rate mortgages, or ARMs, also typically last 30 years. However, due to the nature of the fluctuations in interest rates, many ARMs may list their terms as short as six months. This is because they offer low interest rates at the beginning of the loan that gradually increase over set time periods (for example, after three years). 

The five major elements of mortgage lending

Many things combine to determine your monthly mortgage payment. In addition to the terms of the mortgage loan, your financial situation and the property itself can also affect your payments. The five most important factors in a mortgage application are:


  • Debt to income ratio (DTI).
  • Credit score and history.
  • Property type.
  • Loan-to-value ratio (LTV).
  • Down payment amount.


A mortgage lender uses all of this information to calculate and present a loan offer. Certain loan terms might change depending on how you meet specific criteria - a lower interest rate for a higher down payment, for example.


When shopping for a mortgage, compare terms and details carefully. The more information you have, the better decisions you can make for your financial future.



About the Author
Author

Richard Bocchieri

Welcome to Long Island Living at its best! The South Shore of Suffolk County is a suburban area that runs along the shoreline of the Atlantic Ocean. Homes in this area consist of primarily residential properties. This area tends to be diverse in culture and income as it varies by hamlet, village or town. Residents along the South Shore have access to many beaches, parks and recreational activities. I pride myself on my honesty, integrity, hard work and personal service. My first career was in education, starting as a teacher then finishing as a guidance counselor and achieving my Master’s and two PD's. In 1986, I began my real estate career. In a sense, I am still an educator and offering guidance; this time I am outside of the classroom educating my clients on the selling and purchasing processes; which have become so complicated recently and guiding them safely through the confusing and ever-changing real estate market. It is very satisfying to me to help people with not only the greatest financial asset in their lives but their greatest emotional asset; where they celebrate holidays, raise their families and live their lives. I take the needs of my clients very seriously and as a result, I am proud to say, over 90% of my sales are the result of referrals and recommendations. Primarily, my areas of service are the Townships of Babylon and Islip on Long Island’s beautiful South Shore, near pristine beaches and wonderful boating, yet only 55 minutes from Manhattan; truly the best of both worlds. I'm a graduate of the Real Estate Institute and am certified as a Senior Real Estate Specialist. I also hold a license as a Notary Public. Please feel free to call or visit so I can help you fulfill your real estate dreams. I am a Full Service Licensed Real Estate Associate Broker and provide the following: Free appraisal Rental Mortgages International relocation services Sales Home warranty new homes Free school report Waterfront specialist Notary public Please feel free to call or visit so I can help you fulfill your real estate dreams.

For every sales transaction, a a portion of my commission will be donated to Pronto of Long Island, a nonprofit community outreach center who feed the hungry, clothe the needy and provide hope for our neighbors.  

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