Many homeowners want to get out of mortgage debt fast, so they often look at their mortgage options. A 30-year fixed rate mortgage, while a common choice, may not be the best option for anyone who wants to be rid of their mortgage debt as quickly as they can. A 15-year fixed rate mortgage might be a better option for a number of reasons.
The 30-year fixed rate mortgage often comes with a low interest rate and a low monthly mortgage payment. It’s understandable that many homeowners who are struggling financially choose this mortgage so that they may have a more affordable mortgage payment from month to month.
However, some homeowners fail to realize that a 30-year fixed rate mortgage will often cost much more over the life of that home loan than, for instance, a 15-year fixed rate mortgage. Also, a 15-year fixed rate mortgage will often come with a low mortgage rate as well, and with the repayment timeframe being cut in half, homeowners will often pay much less over their repayment period when interest is factored in.
One big drawback, for many homeowners, on the 15-year fixed rate mortgage is the monthly payment is higher than that of the 30-year fixed rate mortgage. If you are a homeowner who is easily able to afford your monthly mortgage payment you may be able to benefit from this 15-year fixed rate mortgage.
Before entering into any type of mortgage agreement or refinancing your current mortgage loan to a 15-year fixed rate mortgage you must make sure that you are on a financially stable foundation as there are many costs associated with refinancing your home, to a 15-year fixed rate mortgage, and you have to be able to meet these costs with your monthly income.
Choosing a mortgage or refinancing is not something that should be done lightly, so take the time to weigh the pros and cons of your current mortgage versus refinancing to something like the 15-year fixed rate mortgage and see if this is clearly the better option for you. Some homeowners will simply pay more on their monthly mortgage payment than is required in order to get out of mortgage debt faster, but if this is your choice you must be certain that there are no fees associated with paying your mortgage early.