A 15 year mortgage is best suitable for homeowners who are willing to own a house in half the time and are ready to opt for a faster track of repayment when compared to a 30 year mortgage. The accelerated payments of a 15 year mortgage will help you get rid of your loan much faster. Moreover, you will pay substantially less interest over the life of a loan when compared to the more common 30 year mortgage.
However, homeowners dealing in a real estate for the first time are advised to consult with experienced mortgage brokers who will help them get the most suitable rates and other associated fees. Fink & McGregor is one of the top Utah mortgage brokers providing you with such services.
Generally, a 15 year mortgage is chosen by homeowners who are well settled and who are usually providing a substantial down payment. Most people opt for a 15 year mortgage is for the following reasons.
Lower Interest Rates
A 15 year mortgage has interest rates which are usually lower than a 30 year mortgage or other mortgage options. This slight difference of 0.3% in the interest rate will save you a lot.
No Retirement or House Payment Worries
As a 15 year mortgage will end sooner it will save you from worrying about your house payment or using your retirement funds being utilized for your mortgage installments once you get retired.
Faster Ownership Of course with paying installments in a 15 year mortgage you are paying faster and of a greater amount. This means that with each passing installment you are closer to owning your house. Hence, you will become owners of your house in half the time which is taken in a 30 year mortgage. However, remember that to own this advantage you are also paying higher values from your monthly income, which means reduced expenses at the current moment.
Fixed Rate for 15 years
As a 15 year mortgage is an example of a fixed rate mortgage, it means that the payment which is to be paid for the next 15 years is fixed. No matter what the country’s economic situation is or how high the rate of interest goes, you will have to pay a fixed amount for the up coming years. However, there is a pitfall here what if the interest rate falls down? Well, in that case a mortgage refinancing technique can step in for your rescue.
A variety of Options
There are a variety of options when it comes to a 15 year mortgage but some borrowers may choose to utilize a FHA or VA 15 year mortgage as a way to purchase their home.
Despite of these advantages, some people might not find these benefits as fruitful. Thus, it is better to consult professional help before undertaking a long-term investment decision like this.