A traditional mortgage term is usually for 30 years, but did you know that instead of the conventional 30-year fixed-rate mortgage, you can instead opt for a 15-year fixed-rate mortgage?
A 15-year fixed-rate mortgage isn’t for everyone, but it may be the ideal home loan choice for you. Be sure to consider the various positives and negatives of this shorter term before making any final decisions.
This may seem like an obvious one, but it’s worth pointing out: this shorter loan is half the life of the 30-year mortgage. You can pay off your mortgage in just 15 years and be finished, instead of having another 15 years ahead of you.
Because you’re considerably shortening the length of your loan, you’re paying less interest over time. Less interest means your home is costing you less in the end. Therefore, a 15-year fixed-rate mortgage can actually save you a lot of money.
The fixed rate with this type of mortgage, although also available in the form of a 30-year home loan, will provide consistent payments and rates. Unlike an adjustable rate, you never have to worry about your payments going up due to increased interest rates.
You will have larger monthly payments. If a job loss or other financial emergency should arise, it might be a lot more difficult to meet those higher monthly payments than if you were paying less through a 30-year fixed-rate mortgage.
Since homeowners pay less interest throughout the life of the 15-year fixed rate mortgage, they may lose the maximum home loan interest tax deduction.
Do you need cash now for a down payment to purchase a home? A larger down payment can mean the difference of affording your dream home due to lower monthly payments and no mortgage insurance. For those with poor credit, a large down payment might be necessary in order to get approved for a home loan. If you’re receiving structured settlement or annuity payments, we can help. Contact Peachtree Financial Solutions today to learn more about selling some or all of your future payments and receiving that money sooner in the form of a lump sum. The money you receive from Peachtree Financial Solutions can be used to put down towards your future home purchase.
Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.