subject: 15 year loan Mortgage benefits [print this page] 15 year loan Mortgage benefits 15 year loan Mortgage benefits
Many people who are interested in refinancing their mortgage have been interested in the many things like no interest loans or even things like negative amortization. These can have negative consequences at the end, so it is the best to just stick to the original ways of mortgages. Something that is now forgotten but is a good way to go is the 15 year loan. This used to be so popular but many people are falling into the gimmicks and misleading natures of the other types of loans. Many people are starting to think of the 15 year mortgage loan as a pain and are considering it to be much harder and more time consuming than the easy go rich and fancy loans. But many people often tend to overlook the many benefits that getting a 15 year loan has.
One way that it Is better than the 30 year loans is that you can pay off the loan in half the amount of time. You would be rid of the stress quicker. Example if you are currently 30 and get the loan, you will be debt free when you are 45 as compared to 60.Many people are also forced to believe that if it is paid of quicker, the monthly payments are probably also higher! However, that is not true. Actually, the payment is only a little e bit more, not even close to twice as much! A 30 year loan when mortgage refinance no closing costs
might have a monthly payment for 1037$ while the 15 year loan might just have a payment of $ 13832 a month. You see you do pay a little bit more but in the grand scheme of things, if it saves you the stress and work for a 15 year time period, why not go for it?
Second, if you choose the shorter loan life, you may not be realizing but you do save money on the interest of the loan. Approximately for a 30 year loan, you will pay about 213,000 and if you choose the 15 year loan, you would only owe the banks $88,000. These numbers are devised form a formula. This calculates up to a 59% savings.
This shows how the 15 year loan can actually help you pay less money because of the often missed logistics of the other types of loans. You also won't have a sudden increase in interest. Yes, you may have to pay a little extra each month, but if you figure everything out, you save quite a bit on interest and that is something that really matters in the long term. Actually the interest rates are also surprisingly lower for that type of a loan.
However, if the government shuts down Freddie Mac and Fannie Mae, the two biggest government companies, the 30 year loan, a personal favorite of many Americans, may just vanish. This is because the rates may rise without these government facilities and people would just prefer these short term loans.
Well after discussing the financial benefits of the 15 year loan, you may also want to know the downsides of the 15 year loan.
The biggest problem might just be inflation. Now I know that everyone might not have the basis to get a 15 year loan for themselves. But when you are out there looking for a mortgage, the 15 year can definitely be considered. If you have different needs like kids or bigger houses, then stick to the 30 year loans. Again it just depends on you and your financial standings.
