There are many benefits to paying off your mortgage more quickly, but is a 15 year loan right for you?
Interest rates are a sticky business. They rise, they fall…and while we try to predict their outcome, they’re a “moving target” when it comes to really trying to pinpoint where they will land on any given day.
We’ve noticed just a little bit of a bump in rates over the past month or so. Even still, they are holding just over 4 percent, which is still incredible. Are you aware that there are loan programs out there that are not only available at lower than standard rates, but will help you own your home more quickly?
The 15 Year Home Loan
Wouldn’t it be great to not have to make your mortgage payments for 30 years? What about the possibility of putting more of your house payment toward your principle, which increases your equity as you pay down your loan faster? What if, on top of all this, your loan is at a lower interest rate than a traditional 30 year home mortgage?
Such is the case with the 15 year home mortgage loan. On average, these loans are half a percentage point lower (and in some cases, even lower) than a 30 year fixed rate mortgage. For example, as of today (June 25th), 30 year mortgage rates are hovering at 4.14%, while a 15 year mortgage has a prime rate of 3.33%. Quite the difference, huh? Think of how much you’ll save in the long run.
Are there drawbacks to the 15 year mortgage?
As with any loan, a shorter term means higher payments, so expect to pay a higher monthly loan rate than you would on a 30 year loan. This is usually the biggest drawback for most home buyers.
Is a 15 year home loan right for me?
This depends on your own wants, needs, and goals when it comes to purchasing a home. If you’re considering remaining in your home only for a few years before selling, then you may consider a 30 year mortgage just to keep your monthly payment down. However, if you’re looking to remain in the long term, you may want to consider the benefits that a 15 year mortgage loan offers. Yes, you’re paying a higher mortgage payment, but in the long run, you’re saving money in interest, and building equity at a much faster rate.
We have the answers to all of your home buying questions.
Whether buying or selling, Team Avalos is here to help you reach all of your real estate goals. Contact us today for a no obligation consultation.
Team Avalos Real Estate
Keller Williams VIP Properties
25124 Springfield Court, Suite 100
Valencia, CA 91355
Office: (661) 290-3743
Carlos direct: (818) 399-4093
Rose direct: (818) 590-2077