Save Big with 15 year Loan
Save $100,000 or more on mortgage interest costs! Sound impossible? Not really. An old-time mortgage that is once again proving popular allows home buyers to do just that. It is the 15-year fixed-rate mortgage that lets home buyers own their homes free and clear in 15 years. And, while the monthly payments are somewhat higher than a 30-year loan, the interest rate on the 15-year mortgage is usually a lot lower, and importantly:The home buyer pays less than half the total interest cost of the traditional 30-year mortgage.
The purpose of this page is to help prospective home buyers explore the 15-year fixed-rate mortgage – a new option for saving on total mortgage interest costs.
Who It’s For
The 15-year fixed-rate mortgage has proved popular with two very different groups of homebuyers. First, it enables young homebuyers with sufficient income to meet the higher monthly payments to pay off the house before their children start college. They own more of their home faster with this kind of mortgage. Other homebuyers, who are more established in their careers, have higher incomes and whose desire is to own their homes before they retire, may also prefer this mortgage. The 15-year fixed-rate mortgage gives them additional financing options using the house’s equity. For example, they can easily take out a second mortgage if they want to make use of the equity in their home. But you need not fall into either category to appreciate the savings the 15-year fixed-rate mortgage affords homebuyers. Let’s take a closer look at some of the pros and cons of this type of mortgage and what savings you may expect.
The 15-year fixed-rate mortgage offers the qualified consumer four big advantages.
You save more than half the amount of interest of a 30-year mortgage. On a $250,000 mortgage at 3.00%, you save more than $118,912.
Lenders usually offer this mortgage at a slightly lower interest rate than with 30-year loans–typically 0.5 percent to 1.0 percent lower. It is this lower interest rate added to the shorter loan life that realizes the savings for 15-year fixed-rate borrowers.
Fixed-rate means exactly that – no matter where mortgage interest rates go, the payments for this mortgage stay the same from the first to the last. This helps many borrowers plan their budgets with more certainty. They know that their monthly payments will not increase (or decrease) and throw their financial planning off.
The disadvantages associated with a 15-year rate mortgage are really the qualifiers that will tell consumers if this is the mortgage for them.
Because borrowers pay less total interest on the 15-year fixed-rate mortgage, they lose the maximum mortgage interest tax deduction.
Want To Know More?
For more information about 15-year fixed-rate mortgages, or to find out if you qualify, talk to one of our highly qualified mortgage consultants by calling (303) 634-2271 or simply fill out the online form. He or she will be able to help you select the mortgage that is best for you.