15 Year Fixed Rate Mortgage
The 15-year fixed mortgage provides an efficient option when you need a home mortgage loan with a regular, predictable monthly house payment. This mortgage gives you a fixed housing cost that you can count on every month to make budgeting simple. The 15-year fixed-rate mortgage also offers additional advantages for local home buyers in and near Chambersburg, and throughout the neighboring boroughs of Franklin County, PA. If you’re wondering whether the 15-year home loan would fit your lifestyle and help you meet your goals, we’ll provide some important details for you to consider.
What is a 15-Year Fixed Rate Mortgage?
As you might imagine, a 15-year fixed-rate mortgage has much in common with a 30-year fixed-rate loan. In both types of home loans at the beginning, the majority of your monthly payment is allocated to pay the interest on the loan. As the loan period goes on, more and more of each payment will go toward the mortgage principal and your home equity builds.
With the shorter loan period of the 15-year home mortgage, you get the satisfaction of gaining equity much more quickly. If you should ever want or need to tap into your home equity, building it quickly gives you greater freedom. In this day and age, 30 years can seem even longer than it might have in prior generations. With the 15-year mortgage, you’re halving the time it takes to reach the payoff, and many borrowers find this quicker pace to be a more satisfying home buying experience.
Who’s the Best Fit for a 15-Year Mortgage?
A 15-year home loan, with its quick payoff compared to the 30-year version, helps to ensure you’re financially ready for – and comfortable in – the next phase of life. If yours is a young family, this mortgage option allows you to pay off your house before your children reach university and its associated costs. For those nearing retirement, it can be wonderful to have no house payment to worry about in later years. For anyone who likes to clear their debts quickly, the 15-year mortgage can be an ideal option for investment purposes as well as homeownership.
Benefits of the 15-Year Fixed-Rate Mortgage Loan
Perhaps the main advantage that homeowners enjoy with the 15-year mortgage is that you build equity faster and will pay off your home much sooner than with the traditional 30-year mortgage. By paying over a shorter mortgage term, the 15-year loan saves you a significant amount of interest. With the shorter home loan, you could cut your overall mortgage cost by 50% or more. For those buyers with a down payment under 20%, you’ll also save on mortgage insurance with the shorter loan term.
Your mortgage payments will be higher as you pay off the shorter loan. That’s not really a downside, however. Property generally goes up in value and you get to enjoy living there at the same time, so you can get an excellent ROI (return on investment) when you opt for a 15-year mortgage. Your home purchase with a 15-year mortgage could be more profitable than a savings account or stock purchases.