The most common mortgage term is 30 years. However, another mortgage term is becoming increasingly popular, a 15-year mortgage.
In a 15-year mortgage, as its name suggests, you can pay off the loan completely in 15 years. These mortgages have a fixed rate that keeps the payments consistent for as long as you hold the loan. A 15-year mortgage has several benefits that may make it a better option for you than a 30-year mortgage. Let's take a look at the main ones.
The obvious advantage of a 15-year mortgage is that you can pay off your mortgage much sooner than you could with a 30-year mortgage. This is a big benefit to get rid of debt quickly.
Since you are paying off your mortgage over a shorter period, you save money in the long run. The longer the mortgage term, the more interest you will have to pay.
For example, if you are buying a $250,000 house with a 10% down payment, we have the following scenarios:
As you can see, you save $86,493 if you go with the 15-year mortgage instead of the 30-year one.
Equity is the percentage of your home that you own. The more equity you have in your home, the more money you will get back if you sell it.
The mortgage payments on a 15-year mortgage are fixed, so you always know what you will be paying each month. This helps you budget your money better.
A 15-year fixed-rate mortgage is an excellent option for those who want to save money in interest payments and pay off their mortgage as quickly as possible. Many people enjoy the sense of freedom, safety, and accomplishment of paying off debt.
Ask your mortgage lender about the mortgage options that are available to you and consider a 15-year mortgage if it makes sense for your situation.
At Home Got Owned, we want to make sure you're getting the best mortgage rate possible. Our mortgage rates table can help you compare interest rates and mortgage terms to find one that works with your budget.
If you have any questions, please contact us. We would be happy to help you get the best mortgage for your needs.
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