Final answer:
Taking out a loan with a 20-year payment period compared to a 30-year period would lead to higher monthly payments but save on interest and allow faster equity buildup.
Step-by-step explanation:
When compared with a 30-year payment period, taking out a loan with a 20-year payment period would result in higher monthly payments. This is because the loan amount is spread over fewer payments, meaning each payment must be larger to ensure the entire loan is paid off by the end of the term. However, paying off a loan over a shorter period generally saves money on interest in the long run, following the principle that it saves money to pay off debt faster. Additionally, a shorter loan period leads to faster equity buildup since more of each payment goes toward the loan principal.