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The Corporation for Enterprise Development has made a huge announcement by stating the housing market's foreclosure crisis was because of risky loans, not because of the borrowers - originally thought to be occurring because of a lack of education and unawareness of the loan risks. The study involved 260,000 home sales among low-income home owners, involving the 15 or 30 year mortgage interest rate. With today's economy on the edge, not only low-income home owners are struggling with mortgages but we are seeing just as many upper class home owners losing their mortgages.  In today's economy, which mortgage would be better?

It has always been concluded that mortgage loans should never be paid off too early, which would make the 30 year fixed mortgage interest rate the better choice. This is a loan that has lower monthly payments and higher fixed interest rates, while building equity much slower than the 15 year fixed mortgage rate.  But the 30 year fixed mortgage has lower monthly payments and locked-in unchanging interest at a time when jobs are scarce and times are rough.

A big advantage is that people are able to keep payments affordable on smaller homes at a time when people are losing homes. The home owners who want to build equity at a faster pace should definitely go for the 15 year mortgage, but high monthly payments leave struggling people short of cash or dipping into savings at a time when any type of emergency could develops. They need to make sure they can make their payments on time.

Families or couples with financial issues should always buy a home on the 30 year mortgage plan for security reasons - when you can't pay the mortgage the house is gone. Then if things change and money is not as much of an issue, extra payments can be made later on. The 30 year mortgage customer receives larger tax deductions because he will pay more tax-deductible interest in the long run. Alternatively, a home owner who buys his home on a 15 year plan should first make sure he can afford it while purchasing other important things - an IRA, a college savings or 401 (k) plan while keeping cash reserves at the same time he is buying his home.