mortgage simple definition: Pros and Cons of a 15 year Mortgage

Pros and Cons of a 15 year Mortgage

Pros and Cons of a 15 year Mortgage. 15 Year Fixed Mortgage Rates - Reduce Your VA Loan Term and Win Big!

Pros and Cons of a 15 year Mortgage video duration 7 Minute(s) 45 Second(s), published by My Perfect Mortgage on 17 01 2019 - 19:36:20.

Should you be considering a 15-year mortgage in this historically low rate environment? Learn more at https://myperfectmortgage.com Pros and Cons of a 15

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15 Year Fixed Mortgage Rates - Reduce Your VA Loan .

Should you be considering a 15-year mortgage in this historically low rate environment? Learn more at https://myperfectmortgage.com

Pros and Cons of a 15 Year Mortgage

Pros
A 15-year mortgage costs much less than to borrow money over 30 years.

* Save on the total cost of your mortgage - On a 4% mortgage you could pay nearly 46% less interest expense over the life of your loan.
* 15-year mortgages have a lower interest rate - Considering the fact that 15-year mortgages also have a lower interest rate that savings can be even greater, to the tune of tens of thousands of dollars.
* Less loan level price adjustments and fees

Cons
Shorter mortgages naturally will have higher monthly payments than longer-term loans. For example, a 15-year loan for $300,000 at 4% interest has a monthly payment of $2,219, or 55% higher than a 30-year mortgage for the same amount at the same rate.

* Higher payments may limit you to a more modest home
* Higher payments require greater reserves
* Higher payments may force you to forego alternative investments

When you should consider 15 year

* Getting closer to retirement
* Want to create additional financial discipline for yourself
* When you just want the peace of mind of being debt free

When you probably shouldn’t consider a 15 year

* Monthly cash flow is tight
* When you want to invest more in other assets
* When your income fluctuates
* When you have other competing expenses

The Bottom Line

A 15-year mortgage can save you a lot of money. Imagine a $300,000 loan, available at 3.25% for 15 years or at 4% for 30 years. The combined effect of the shorter term and the lower interest rate means that your cost of borrowing for 15 years is only $79,441, compared to $215,609 over 30 years, or nearly two-thirds less.

Learn More:
https://myperfectmortgage.com/15-year-mortgage/
https://myperfectmortgage.com/pros-and-cons-of-the-15-year-fixed-mortgage/
https://myperfectmortgage.com/is-a-15-year-mortgage-right-for-you/