15 Year Fixed Rate Mortgage
If you seek a mortgage with a specific payment rate each month, a 15-year fixed rate mortgage may be a feasible choice for you. With this type of loan, you pay a specific amount every month, and that amount is not subject to change for 15 years. Thus, a mortgage of this type offers consistency, as well as several other benefits to homeowners in Martinsburg and the surrounding areas. Whether you live in Martinsburg, Charles Town, or Shepherdstown, WV, a 15-year fixed rate mortgage could be ideally suited to your circumstances.
Fixed Rate Mortgage Over 15 Years
A 15-year home loan with a fixed rate is similar to a 30-year loan of the same type, in that you pay the same amount each month for 15 years. Like a 30-year fixed rate mortgage, the breakdown of the payments for this loan does shift during the term of the mortgage. Your payments are spread out over a 15-year period, with most of the payments going toward the interest for the first part of the term. During the final part of the term, the bulk of the payments will cover the principal.
The Advantages of Using a 15-Year Loan with a Fixed Rate
Because you are paying a 15-year loan in half the time that it takes to pay a 30-year fixed rate mortgage, the payments will, naturally, be higher. While this could deter some people from choosing this type of mortgage, it actually costs much less over time than a loan that takes 30 years to pay. The cost of a mortgage is its annual interest rate; therefore, you will pay much less in interest over 15 years than during a period of 30 years. In fact, you could pay less than half for the 15-year mortgage than you would pay for the 30-year home loan.
Your monthly payments for a 15-year home loan with a fixed rate are considered by many financial planners to be a forced type of savings. Instead of investing the same money in a money market account or another type of investment, you are investing the money in your home. Your home will hopefully appreciate over time, making the increase in value the return on your investment.
Generally, if you are putting less than 20 percent down on your home, the mortgage insurance will also be less for a 15-year fixed rate mortgage than for a 30-year home loan.
Who Is Best Suited for This Loan?
If you don’t like owing money, this accelerated version of the fixed rate mortgage could be for you. You can pay off the loan and own your home in half the time you would with a 30-year fixed rate mortgage. This may be perfect if you are just starting a family, since the loan will be paid off by the time you are ready to start paying for college tuition for your kids. This loan could also be a viable choice if you are 15 years or more from retirement age. By the time you retire, you will have paid off your mortgage.
Apply for a 15-Year Fixed Rate Mortgage
If you think a 15-year fixed rate mortgage might be a good fit for you, speak with a consultant at Homespire Mortgage. We serve the residents of Martinsburg, WV, as well as the surrounding towns, such as Falling Waters, Hedgesville, Shepherdstown, and Charles Town. Call us today for more information.