Which Is Better : 15-Year Fixed Rate Mortgage Or 30-Year Fixed Rate Mortgage?

15-year fixed rate or 30-year fixed rate?

As a home buyer or refinancing household in Fairfax, VA , you have choices with respect to your mortgage.

You can choose a loan with accompanying discount points in exchange for lower mortgage rates; you can choose adjustable-rate loans over fixed rate ones; and, you can choose loans with principal + interest repayment schedules or repayments which are interest only, as examples.

For borrowers using fixed rate loans, there’s also the choice between the 30-year and 15-year fixed rate mortgage. Each has its positives and negatives and neither is “better” than the other.

Choosing your most appropriate fixed-rate term is a matter of preference and, sometimes, of budget.

The 15-Year Mortgage
With a 15-year fixed rate mortgage, mortgage rates are often lower as compared to a comparable 30-year fixed rate mortgage. However, because loan repayment is compressed into half as many years, the monthly payment will necessarily be higher, all things equal. On the other side, though, homeowners using a 15-year fixed rate mortgage will build equity faster, and will pay less mortgage interest over time.

The 30-Year Mortgage
With a 30-year fixed rate mortgage, mortgage rates tend to be higher as compared to a 15-year fixed rate loan, but payments are much lower — sometimes by as much as 50%. Lower payments come at a cost, however, as mortgage interest costs add up over 30 years. Regardless, 30-year fixed rate mortgages remain the most common mortgage product for their simplicity and low relative payment.

Which One Is Right For You?
There is no “best” choice between the 15-year fixed rate mortgage and the 30-year fixed rate mortgage. Choose a product based on your short- and long-term financial goals, and your personal feelings regarding debt. Mortgage applicants choosing the 30-year fixed rate mortgage can qualify to purchase homes at higher price points, but those using the 15-year fixed rate product will stop making payments a decade-and-a-half sooner.

There are benefits with both product types so, if you’re unsure of which path works best for you, speak with your loan officer for guidance and advice.

0 commentsback to post

Other articlesgo to homepage

What To Do When Your Home Doesn’t Appraise At Its Purchase Price

What To Do When Your Home Doesn’t Appraise At Its Purchase PriceComments Off on What To Do When Your Home Doesn’t Appraise At Its Purchase Price

Experienced home sellers know that reaching a sales agreement with a potential buyer can be just the start of the negotiation process.

Short Sale : Writing A Letter Of Hardship

Short Sale : Writing A Letter Of HardshipComments Off on Short Sale : Writing A Letter Of Hardship

The short sale process starts with a letter of hardship.

How To Maintain Adequate Homeowners Insurance Coverage

How To Maintain Adequate Homeowners Insurance CoverageComments Off on How To Maintain Adequate Homeowners Insurance Coverage

Whether you’re buying a home, or own one already, revisit your hazard insurance regularly.

When It Pays To Refinance Your Mortgage — Literally

When It Pays To Refinance Your Mortgage — LiterallyComments Off on When It Pays To Refinance Your Mortgage — Literally

There are many reasons why homeowners opt to refinance, from obtaining a lower interest rate, to shortening the term of the loan, to switching mortgage loan types, to tapping into home equity.

Questions First-Time Home Buyers Should Ask

Questions First-Time Home Buyers Should AskComments Off on Questions First-Time Home Buyers Should Ask

Buying your first home can be exciting, but you should also do your research to make sure that you ask the right questions.

read more
Fill out my online form.

Contacts and information

Most Popular Articles
VA Streamline | IRRRL | VA Streamline Refinance Loan
Compare Mortgage Rates the Smart Way
VA Streamline Refinance Rates - How to Get the Best Deal
Best Refinance Lenders - How to Find the Pros

Hot Rates, Clear Terms, Cool Savings

Social networks

Most popular categories

© 2012 HotRateQuote.com theme by Joe Design All rights reserved. Compare Mortgage Rates Lower Interest Rate