4 Reasons You Should Consider A 15-Year Mortgage
Jul 21, 2017 | Mortgage Tips
When people think about loan programs, many believe that their only option is a 30-year repayment time. But that isn’t the case! If you have a steady job and can afford to do so, there are many benefits to cutting your repayment time in half with a 15-year mortgage. Wondering if a 15-year mortgage is the right option for you? Learn 4 reasons why you should consider this loan option below!
1. It will help you save you money in the long run
While your monthly payments will be higher, cutting your mortgage repayment time in half means you will pay less in interest. This will help you save up to tens of thousands of dollars! In addition, 15-year mortgages usually offer better interest rates than other loan products.
2. It will help you build equity faster
Not only will it help you save money, but a 15-year mortgage can also help build equity in your home faster. This is beneficial for several reasons, including that it will be easier to refinance if you choose to do so in the future. Because you have a smaller loan to value ratio, you present a smaller risk to your lender compared to someone with a 30-year mortgage, allowing you more financial opportunities.
3. It will help you pay off your mortgage before retirement
If you’re in your 40s and want to retire in your early 60s, you will still be paying off your loan if you choose a 30-year mortgage. But if you choose a 15-year option, you will not have to worry about making monthly payments once you are retired, giving you more financial flexibility during your golden years. This will allow you to manage your expenses easier once you have switched to a fixed income.
4. It will help you stay disciplined
Many people who choose a 30-year mortgage try to accelerate their payments to help them save money. This sounds like a great idea, because it will help you save money on interest without being tied to a high monthly payment. But the problem with this plan is that many people don’t stick to it. Without the commitment of paying at an accelerated rate, it is too easy to slack off.
Apply for a Mortgage Today with Home Point Financial
Are you interested in paying off your mortgage at an accelerated rate? There are many online calculators that can help you decide and compare the amount of payments, interest rates and more, helping you see the difference between a 15-year and 30-year mortgage. For more information and to see if this is the right option for your situation, please contact us today to schedule a meeting at the branch nearest you!