Many mortgage product options are available to borrowers today, but which type of mortgage is best for you depends on your specific situation. One of the biggest deciding factors is how many children you have. If you want to have a large family, then you may want to consider a six-to-one mortgage since it provides better value for your money. However, if you’re single and hate kids, then you may want to opt for a 28-to-one mortgage since it provides amazing value for your money and gives you the flexibility to afford a luxurious lifestyle without having to worry about money too much.
Which Is Better: A 6 to 1 or 28 to 1 Mortgage?
The short answer is that it depends on your situation. Let’s take a look at the pros and cons of each option so you can make the right decision for you.
Pro’s
- Better value for your money – With a six-to-one mortgage, you’re getting six times the value you’re paying for (i.e., $120,000 for a $600,000 mortgage compared to $60,000 for a $280,000 mortgage).
- Larger loan amount – Most mortgages have variable rates and the amount you’re borrowing affects how much you’ll need to pay in interest. With a six-to-one mortgage, you’re starting with a larger loan amount and therefore avoid paying quite as much in interest. In fact, with a six-to-one mortgage, you’ll pay only 24% interest on a $600,000 loan compared to 32% interest on a $280,000 loan. Huge difference! (And you’ll still end up paying less in total because you’re starting with a larger loan amount.)
- More flexibility – If you have the flexibility to make your mortgage payment every two weeks rather than every week, then consider doing so to avoid severe financial stress in case of an emergency.
- Better chance of getting your money back – In the event that you decide to sell your property before the end of the loan term, you’ll have to make up the difference (between what you originally paid for the property and what it’s worth today). However, with a six-to-one mortgage, you’re not as exposed since you’ll be splitting the payment for the mortgage and property purchase with your partner. (If you want to buy a home together, then you should consider a five-to-one mortgage or four-to-one mortgage.)
Con’s
- More legal hassles – You’ll have to deal with a lot more legal hassles if you opt for a six-to-one mortgage. For example, if you want to change jobs or lenders, you’ll have to notify them all since they’re all tied to the same package (i.e., your mortgage).
- Increased chances of home loss – If you’ve noticed a pattern in your life, you’ll most likely agree that homes lose value over time. If you want to guarantee that you’ll be able to pay off your mortgage loan in full, then you should consider a 28-to-one mortgage since it offers better value for your money and gives you the flexibility to make large purchases without worrying about the cost. (Of course, you should still lock down adequate insurance coverage in the event of an accident or loss.)
Which One Should You Choose?
In the end, it depends on your situation. If you want an amazing lifestyle, then you may want to consider a six-to-one mortgage since it gives you the ability to make large purchases (without hurting your wallet too much) and offers better value for your money. However, if you’re looking for a safe and secure place to call home, then you may want to opt for a 28-to-one mortgage because it provides amazing value for your money and gives you the flexibility to make large purchases without having to worry about money too much. Always remember that whatever you decide, it’s a decision you’ll have to live with for the rest of your life.