Re/max Classic Realty
Alexis Malsbury, Re/max Classic RealtyPhone: (914) 309-0136
Email: [email protected]

Understanding the term of a mortgage

by Alexis Malsbury 01/09/2023

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

Alexis Malsbury

As a real estate agent, my mission is straightforward: to transform any apprehension you may have about your real estate goals into a positive, stress-free experience while exceeding your expectations. A Westchester native, I bolster my customer service expertise with my Hudson Valley insights: From the region’s historic estates and wineries to outdoor adventure and natural beauty, I can find the property — and the area — that fits you and your family to a tee. 

Before launching my real estate career, I’d spent many years serving as Director of Marketing, Communications, and Environmental Education for GlenArbor Golf Club in Bedford, New York. I subsequently drew upon my achievements in environmental education to work as a consultant in the agriculture and farming industry, managing operations for several farms throughout Westchester County. My experiences extend to supporting and volunteering for several nonprofits, including Guiding Eyes for the Blind, where I have fostered dogs in the Brood/Stud Program for over a decade.

Before joining RE/MAX, I had spent several years as an agent at a small Westchester-based real estate brokerage. My entire background has significantly influenced my career and exceptionalism as a real estate agent, including cultivating long-lasting client relationships across a broad spectrum with my ‘can-do’ attitude. My ease of availability and supreme flexibility have become cornerstones of my service while I negotiate every one of my clients’ deals with precision. 

I’m just a phone call or email away for all your buying and selling needs: (914) 309-0136 or [email protected]. I’m always ready to answer any questions you may have and go out of my way to help you achieve your real estate goals!