When looking to purchase a home, you will realize you have many decisions to make. First, you must decide on a mortgage lender and loan that suits your financial circumstances. One major decision is determining whether a 15-year or 30-year mortgage is financially best for you.
Here is a review of a 15-year mortgage loan and the benefits a 15-year mortgage loan can offer homeowners.
Related: What is a Mortgage? Types of Mortgages and How They Work
What is a 15-year Mortgage?
A 15-year mortgage loan is a home loan that will be completely paid off in 15 years. Homeowners with a 15-year mortgage pay more monthly and typically have a lower interest rate.
15-year mortgages typically have a fixed rate, meaning the principal and interest rates will stay the same for as long as homeowners have the mortgage.
These types of mortgage loans are ideal for those who want to retire mortgage free or for those who simply want to be debt free sooner.
#1 Pay Off Your Home More Quickly
One significant benefit of a 15-year mortgage loan is that you will own your home in 15 years. In addition, your home will be paid off, and you will have the financial freedom of owning your home free and clear of a mortgage.
Many people have the financial goal of being debt-free, and a 15-year mortgage loan will help you achieve that goal sooner.
#2 Pay Less Interest
Another benefit of a 15-year mortgage is the money you will save on interest. With a 15-year fixed mortgage, you will pay less interest than with a longer-term mortgage.
If you had, for example, a 30-year mortgage, there would be twice as many years in which interest would add up. As a result, you could pay more than double the amount in total for your home.
With a 15-year mortgage, you reduce the time to pay it off, reducing your interest.
#3 Get Lower Interest Rates
Since 15-year mortgage loans are typically less risky for mortgage lenders, 15-year mortgage loans often have lower interest rates. With lower interest rates, homeowners will save additional money by choosing a 15-year mortgage loan.
#4 Enjoy Retirement Without a Mortgage
One of the most appealing benefits of a 15-year mortgage loan is that homeowners can retire without a mortgage payment. 15-year mortgage loans will give retirees comfort and safety knowing their home is fully paid off.
Marimark Mortgage
Marimark Mortgage is based in Tampa, Florida, and proudly serves homebuyers and homeowners in all of Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA, and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing, and help clients to lower their monthly mortgage payments.
To get started with a mortgage to buy your next home, please fill out our Quick Mortgage Application, or contact us direct.
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