A 15 year fixed rate mortgage loan is a loan in which the rate and the monthly payment stay the same over the 15 year period. With a 15 year fixed mortgage loan, you will finish paying the loan off faster than other loans with longer terms. A 15 year loan has a shorter amortization schedule, than a 30 year. By making the scheduled payments according to the 15 year amortization table, you will pay less interest than a traditional 30 year mortgage.
Is a 15 Year Fixed Rate Mortgage Loan right for me?
Possibly. If you want to pay less interest, and want to pay off your home fast, this is the loan to do it with. It is also a great tool if you need to refinance to get some cash out, but don't want to reset your loan back to a 30 year mortgage. Additionally, a lower rate is typically associated with a 15 year mortgage. It also helps you build equity over time a lot quicker! The reason for such great benefits is because, the 15 year loan is a shorter period than other loans (ex. 30 years).
Is a 15 year or a 30 year loan better?
Keep in mind that because this is a shorter term for a loan, all things equal your monthly payments can be higher when compared to a 30 year loan. This doesn't mean that a 30 year loan is better, it just means you will be paying off the loan quicker than you would a 30 year mortgage. Both types of loans have their benefits. A 30 year loan may have a lower monthly payment, and you can also pay more than the monthly minimum payment; just be sure to pay toward the principal balance. If you are looking to build equity fast, pay off your home sooner, and do not mind a higher monthly payment, then, a 15 year is right for you. To really take a look and see if a 15 year fixed rate mortgage is right for you, contact your local loan officer today.