Save a Fortune on 15-Year Loans
An old, traditional loan is recently proving itself popular once
again. What loan is this? It’s the 15-year fixed-rate mortgage
loan that allows home buyers to officially own their homes in
15-years, no strings attached! And although the payments are slightly
higher than with 30-year loans, the home buyer will pay less than
half of the overall interest of a 30-year mortgage.
The 15-year home mortgage attracts both first time home buyers
and more experiences and financially secure home buyers. The loan
allows first time buyers to pay off the loan before the children
start college or before the kids plan weddings, while it also
allows older home buyers to pay off the loan before retirement.
The 15-year fixed-rate mortgage also gives many financing options
using home equity. Although these two groups are especially benefited
by the 15-year mortgage, all home buyers can appreciate this loan
and find it a very rewarding option.
There are a number of advantages of the 15-year fixed-rate mortgage.
First of all, you will own your home in the half the time that
you would with a 30-year mortgage. You also save tremendously
on interest with a longer-term loan. For example, on a loan of
$75,000 at 9.5 percent, you would save over $95,000.
Since you are paying the loan off faster, as lenders want to
expedite the loan payback process as much as possible, you will
be receiving a lower interest from the mortgage company. Remember
that the definition of fixed-rate means that your rate will not
change, so even when the market rate increases, your interest
will not rise. Also, 15-year mortgages fcan be insured by the
Veterans Administration, the Federal Housing Administration and
many private mortgage companies.
The disadvantages of a 15-year loan may be that the monthly payments
are higher than with a 30-year loan by about 10 to 15 percent.
Also, since you are paying less interest on the loan you will
not be able to deduct as much from your taxes.
There is no argument that you can save considerably by obtaining
a 15-year mortgage instead of a 30-year loan. What you need to
do is consider your home owning goals and needs, and decide if
the 15-year loan is practical and feasible for you.
Determine whether or not you can afford it, and whether it is
important to own your home sooner rather than later. Weigh the
pros and cons and make an educated decision based on your knowledge
of the loans, and remember that there are also 10, 20 and even
25-year loans out there. Always remember, you have more than one