San Diego, CA (PRWEB) March 26, 2014
In an effort to help new home buyers understand all of their options when it comes to home loans LoanLove.com has released a number of guides which outline some of the most popular loan options available. One of these recent guides takes a look at 15-year fixed mortgages and explains some of the major pros and cons associated with this particular home loan option. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending trends, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love.
The new 15 year fixed mortgage guide starts by saying, “Although the 30-year fixed mortgage has traditionally been the darling of home buyers, today many buyers are opting for shorter terms so they can pay their homes off in less time and shed the burden of a monthly mortgage payment more quickly. The leader of the pack in shorter-term fixed-rate mortgages is the 15-year fixed rate loan. Just like its 30-year counterpart, the 15-year fixed rate mortgage offers borrowers a set term – in this case, 15 years – and a fixed interest rate that’s set on the date the loan is approved (or applied for, if you’re able to “lock in” your rate) and which remains in effect for the entire life of the loan.”
Loan Love further states that this type of mortgage is especially popular with borrowers who have put down a considerable down payment on their loan, such as those who have sold their former house and have used the proceeds to fund the down payment on their new home. While a large down payment is not a prerequisite for having a 15 year fixed mortgage, it does help to reduce the principle on the loan, making the monthly payments easier for the home loan borrower to handle.
The guide goes on to say, “In addition to having your home paid off in less time than a traditional 30-year mortgage, a 15-year fixed mortgage offers other advantages to borrowers:
- More equity in less time: Because you’re paying a larger portion of the principle each month, a 15-year loan builds equity faster than a 30-year loan.
- It’s budget-friendly: Like any fixed-rate product, a 15-year fixed mortgage requires the same payment every month, which makes it easier to plan for.
- You’ll pay far less total interest over the life of a 15-year fixed-rate loan compared to a 30-year mortgage: usually tens of thousands of dollars, and often more.
- Finally, interest rates for 15-year loans are often lower than rates associated with 30-year mortgages.”
However, Loan Love also points out that, just as any other loan option, 15-yr fixed rate mortgages are not without some downsides. The chief disadvantage of this type of loan is, because the loan term is shorter, the monthly payments will be higher. Also, since the rate is fixed, the borrower will need to refinance their loan if they would like to capture a lower rate sometime during their loan term.
The Loan Love guide ends by saying, “If a fixed-rate loan sounds good to you, the 15-year term is a great choice if you can afford the bigger monthly payments. Although paying your loan down faster sounds attractive, take the time to carefully review your finances to be sure that bigger monthly payment won’t get you in over your head.”
For more information on this home loan option, click here to read the full guide at LoanLove.com.