Homeowners that are looking for ways to get out of mortgage debt fast often turn to options like a 15-year fixed rate mortgage in order to cut down on the repayment timeframe on their home loan. Homeowners that choose lengthly mortgage plans usually end up paying more over the long-run when interest is factored in.
It’s for this reason that the 15-year fixed rate mortgage is used by many homeowners as it has a shorter repayment period, typically comes with a lower mortgage rate than an 30-year fixed mortgage, and can cost much less when all is said and done.
Yet, one drawback of this type of home loan is the higher monthly mortgage payment. Many homeowners get the 30-year fixed mortgage so they can have a better chance at a lower mortgage payment each month, but again, the 15-year mortgage usually brings a more expensive payment.
However, for those who can afford this payment and want to save money over the life of their home loan, the 15-year mortgage may be a better option. Some homeowners will get a mortgage with a low monthly payment and simply pay more than is required each month, which will allow a homeowner to get out of mortgage debt years ahead of schedule, depending on the amount paid of the minimum requirement. Yet, doing this may bring penalties for early payment.
Homeowners will have to look at their financial situation before forming a plan for getting out of debt early. Paying more on a home loan each month or getting a mortgage with a shorter term may be helpful, but a homeowner must be sure they can afford these options. It’s often advised that homeowners talk over these plans with their lender and evaluate where they stand financially before proceeding with an particular plan.