What is a 15 Year Fixed Mortgage?
It is a Mortgage loan that you pay over a 15-year period making 180 equal monthly payments. It offers you a lower interest rate than 30-year fixed and you’ll own your home in half the time! One thing to remember is, with a 15-year loan you’ll pay a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan to have lower monthly payments but usually make extra payments to attempt to pay it off sooner.
We are here to make your home loan process easy. With our knowledge and experience you’ll be smoothly sailing to your home ownership dream.
We will show you the difference between loan programs so you can choose the right one for you whether you are a first-time home buyer or a professional RE investor.
Our goal is ~always~ to help you get approved.
15 Year Mortgage Benefits
1. You achieve full home-ownership much faster
Owning your home is a major event. Compared with a 30-year fixed, a 15-year fixed mortgage cuts the time it takes to get there in half. A lot of people choose that path for a feeling of safety from knowing that their home is fully paid off.
2. Reduces your interest rate expense
Lenders are exposed to fewer years of risk on a 15 year fixed mortgage and because of this, they charge a lower interest rate. Resulting in you paying less interest over the years saving your hard-earned cash.
3. Builds your property equity faster
With lower interest rate and higher monthly payment amount, you pay down the principal balance much quicker. So the 15 year fixed mortgage will build the equity in your home much faster.
4. Use a 15 year mortgage as a retirement tool
If you plan on retiring in under 30 years, you could eliminate your monthly mortgage payment by the time you retire.
15 Year Mortgage Disadvantages
- Your monthly payments are larger
Payments for principal and interest every month for a 15-year fixed-rate mortgage will be about 50% higher than the ones on a 30-year home loan. Don’t forget, you’re also paying property taxes and insurance every year as well as mortgage insurance (if you put less than 20% down). All this could make it hard to respond to emergencies and other needs.
2. Your home affordability is tighter
The higher monthly payments mean you might only qualify for a less expensive loan, which means buying a smaller house or not being able to live in your dream neighborhood.
3. You could pass on great opportunities
As you’re using more money for monthly mortgage payments, that means they are not available for other investments. It could be a right move on a stock market or having a down payment on an investment property with an opportunity of cash-flow and passive income.
What is a 15 Year Fixed Mortgage? – Final Takeaway
Using a 15-year fixed mortgage loan:
-> You pay off your property faster
-> You pay less in interest costs over the life of your loan
-> You can typically get a lower interest rate vs a 30 year loan
~ If you’re unsure that you’ll always be able to make bigger payments, choose a mortgage with a longer term and opt to pay extra toward the principal each month. That way, you’re still paying down the mortgage more quickly, but you aren’t in hot water if there’s a month where you can only make the minimum payment.
~ Stretching the loan over 30 years and keeping your payments low could give you more property choices.
The best thing you can do is contact me today to help you get a 15 year fixed mortgage loan.
The quicker we intake your information, the faster we can work with our lending institutions on getting your loan approved.