Pros and Cons of 15 year home loan fixed mortgage: 3CALoan
There are many different home loans available while buying a home. There are different loan varying term lengths, names, and many other factors to consider. Your local mortgage loan officer will tell you all the things related to the home loan. The local mortgage loan officer will guide you thought out the process of the home loan. In the market, there are different loan term options like a 15 year home loan and 30-year home loans. Also, you have to select an option in the rate of mortgages like an adjustable-rate mortgage or a fixed-rate mortgage. You will get benefits for your specific needs in every different type of loans. On this article, we will discuss a 15 year home loan with a fixed rate. In this type of home loan, “fixed-rate” indicate the interest rate of the home loan and “15” indicate the term of the home loan.
WHAT IS A 15-YEAR FIXED-RATE MORTGAGE?
A fixed-rate mortgage is also known as a vanilla wafer mortgage loan. The loan in which you need to pay the same amount of interest rate for 15 year home loan term. The rate and term of your home loan will affect many parts of the home loan. This type of mortgage will affect things like the amount of the monthly payment of your home loan and total interest rate which you will pay throughout your home loan.
THE LOAN TERM
There are many advantages to a 15 year home loan with fixed-rate. As compared to the 30-year loan, you will pay off your home loan in half of the time. In this type of loan, you will charge less amount of interest rate and you will also build equity faster. By taking this type of loan you will able to focus on other things in your life like paying fees for your children, traveling with your family, saving for retirement and many more.
YOUR MONTHLY PAYMENT
Your monthly payment may be higher with a 15 year home loan than with a 30-year loan term. If your loan amount is $184,000 and you have a fixed interest rate of 3.25%, you’ll pay about $1,045 every month with a 15 year home loan and about $710 a month with a 30-year loan. Because your monthly payment will most likely be lower with a 30-year home loan term than a 15 year home loan term, you may be able to qualify for a larger loan amount if you choose a loan with a longer term.
For example, your loan amount to be funded is $368,000 and you have opted for a fixed interest rate which is 3.25%, your monthly payment will be $2,090 with 15 year home loan and $1,420 with the 30-year home loan. If your loan amount is bigger than you will be able to qualify easily for a loan with longer term.
You will lower interest rate with shorter loan terms. In the example above, for a home loan amount of $368,000, you will get lower interest rate with 15 year home loan term and higher interest rate with 30-year loan term. This is because when you opt for the short-term loan then your local mortgage loan officer assume less risk and they also get their interest back faster.
With a fixed- rate loan, the interest rate for you will remain same for 15 years from now until you make the final payment of your home loan. For example, your interest rate is 3.5%, it will remain same throughout the life of your home loan. It might be good for you because interest rates fluctuate daily.
What do you think a 15 year fixed-rate home loan is right for you? Or maybe a 30-year home loan term will be the right option for you. To find out more information about the ins-and-outs of your home loan options, contact us at (818) 322-5626 today! We will run you through the details of loans and hold your hand throughout the process. 3CALoan local mortgage broker provides no tax return home loan which is also called no tax return, without tax return, private hard money home loan, private hard money loan, bank statement home loan, bank statement loan, equity loan and many more. We help our customers every step of the way. We prioritize informing and educating our clients about the home buying process. Our client’s happiness and confidence upon closing a deal reflect our excellent quality services.