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15 Year Fixed Loan Considerations
Interest Rates and Fees
best loan period
What is a 15 Yr Fixed loan?
A 15-year fixed-rate mortgage is a home loan that has a repayment term of 15 years. Borrowers are offered the same interest rate (fixed) and monthly payments throughout the duration of the loan. The long-term benefit from a fixed rate mortgage to 15 years is that it is cheaper than other mortgage options. However, monthly payments are higher.
Who are eligible for it?
If you have a higher income scale that proves you can afford to make higher payments associated with a mortgage in the short term, then it is easy to qualify. You can also find interest rates that are between 0.5 and 1% lower than they are for a 30-year mortgage.
How to get this loan?
Start by comparing and looking for lenders offering 15-year mortgage rates in your area. A fixed rate mortgage to 15 years allows you to buy a home or refinance your current mortgage with lower, shorter and much affordable monthly payments. Call us now to compare the best rates.
What credit score is required for this loan?
To qualify for a 15-year fixed-rate mortgage, you need to own at least 20 percent of equity and a FICO credit score of at least 700.
Advantages and Disadvantages
- Interest rates are generally lower: Historically, interest rates on 15-year mortgages are way lesser compared to other mortgage options, so it’s a good boost to your bottom line.
- You’ll make fewer payments (180) than you would with a conventional 30-year mortgage (360), which means less total interest paid: Even if you got the same interest rate for 15- year mortgage as that of 30-year mortgage. you will still be paying less in interest payments since your mortgage ends in 15 years instead of 30.
- You’ll pay off your mortgage faster: It is indeed a relief and celebration if you are able to pay off your loan faster. It’s one less bill and now own your house free and clear.
- You can build equity faster: Because you are paying for your principal in half the time you would a 30-year mortgage, it accelerates the process of building equity. Equity is basically the amount of home ownership.
- You pay more each month: For many people, the biggest monthly payment is the main impediment towards 15-year mortgages. You pay a larger portion of the principal each month compared to a 30-year loan.
- Your money is locked at home: Depending on your budget, spending too much on a monthly mortgage may leave less funds for other investments, which could be more lucrative.
- You qualify for a lower mortgage amount: Lenders want to make sure you can comfortably afford to pay back, so if you max out your budget with a 15-year mortgage then they might likely lend out less money.
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