Home buyers have the option of choosing from countless mortgages and homeowners are in the same position if they refinance. However, most people opt for low interest up front and in some cases this can work to a homebuyer’s best interest. Yet, there are some who choose the wrong mortgage for the wrong reason, but with such a low interest rate, is a 15-year fixed rate mortgage a bad option?
Commonly, homeowners either choose and adjustable rate mortgage since they often have a low interest rate and payment up front, but many homeowners are caught in a bad position when the interest and payments sometimes adjust to a higher rate. On the other hand there are those who will take a 30-year fixed rate mortgage for the low interest and monthly payments over the long-term.
A 15-year fixed rate mortgage on the other hand may be a better option for some. The adjustable-rate mortgage may swing to a level you can’t afford and the 30-year mortgage is going to cost you a sizeable sum in interest. The 15-year fixed rate mortgage brings a much lower interest rate than the 30-year, and most often an adjustable-rate mortgage, but people are unwilling to take this mortgage because of the payment.
The monthly mortgage payment on a 15-year fixed rate mortgage is higher than the 30-year fixed, but you are able to, obviously, pay off your mortgage much faster and the interest you will save over the life of the mortgage is substantial compared to other mortgages.
Again, the monthly payment on a 15-year fixed rate mortgage is more expensive so you should only get this mortgage if you are able to afford the payments. In the end you will save much more on the interest with this shorter-term loan than most other mortgages available, but if you’re considering this loan, be sure it is the right one for you before proceeding.
