Many loan applicants gravitate toward 30-year mortgages. With a 30-year mortgage, the monthly payment may be considerably lower than with a 15-year mortgage. At the same time, the longer term and the lower payment may enable applicants to qualify for a larger loan amount and to purchase a nicer home as a result. However, there are also excellent benefits associated with choosing a 15-year mortgage. After you get familiar with these benefits, you can more confidently make a loan decision that is a better fit for your current finances and future plans.
While the mortgage loan payment for a 15-year mortgage will be higher, the debt will be paid off in half the time. This means that you could own your home outright in only 15 years. At the same time, faster debt reduction results in equity growing at a faster rate. In many cases, the interest rate on a 15-year mortgage may be lower than the rate for a 30-year mortgage. The lower rate is combined with faster debt reduction to yield tremendous savings in interest charges over the life of the loan.
Whether you are planning to purchase a new home soon or you are exploring the benefits of refinancing, it may make sense to request loan quotes for 15-year and 30-year terms. In addition to reviewing the monthly payments, compare total interest charges and the loan payoff debt to see the true differences between these options. Contact MortgageDepot to request customized quotes that are applicable for your qualifications.
Contact one of our loan consultants to learn more.