Owning a home is part of the American dream. What many people don't talk about is that until your loan is paid off you don't technically own it - the bank does. A 30 year mortgage is the standard choice for most home owners, not because it's all they can afford but because they don't know about other options. Purchasing a home with a 30 year mortgage means that you will be paying the mortgage lender and not actually own the home until 30 years have passed. For young borrowers that may not seem significant but life has a way of changing and financial circumstances are hard to predict 30 years into the future. Prior to purchasing or refinancing a home consider a 15 year mortgage term and how it can improve your long term financial situation.
How a 15 Year the best tribal loans Can Help
1. Pay Less. Let's compare a 30 and 15 year loan. A $300,000 mortgage at 6% over 30 years will cost $347,000 in interest. That same loan on a 15 year term will cost $155,000 in interest over the life of the loan. By simply shortening the loan term this home owner would save close to $200,000!
2. Interest Rates. 15 year mortgage interest rates are typically lower than 30 year interest rates. This discount can be anywhere from 0.125% to 0.75% depending on the lender and current rate environment. This provides an additional savings when evaluating how much interest you will pay over the life of the loan.
3. Savings. By paying off your mortgage sooner you can redirect what you were paying on the loan into savings and retirement accounts. This can create a large nest egg so that you have the financial freedom to make choices, rather than working just to pay the bills.
4. Income. If this is your first home consider staying there until the mortgage is paid off, fifteen years than turning it into a rental. This can be an excellent source of income to augment what you make monthly and create a nest egg.
5. Retirement. Many people worry about how, and if, they will be able to retire. People see themselves working longer in order to afford to pay for their home and basic necessities. You don't have to be in that situation. A 15 year mortgage term lets you pay off your home well before you retire so that when the day comes - you have very few bills to worry about.
Refinancing your existing mortgage loan into a 15 year term can also be beneficial. If you have had your existing tribal loans online direct lender for less than 14 years - you will still save money. The key with refinancing is to avoid extending out your loan term. For example if you got a mortgage easy tribal loans no credit check in 2002 with a 30 year term you would only have 20 years left. Refinancing to a 15 year loan would shave five years off of the pay off date. Refinancing with another 30 year term would extend the payoff date by an additional ten years. Your mortgage lender can review all of your loan options and show you the difference in payment, interest rate, and total interest on a 30 and 15 year loan. Carefully review your options and consider investing in your financial future by choosing a 15 year mortgage loan.
When thinking about refinancing for retirement keep an eye on a good mortgage rates forecast and look out for any housing market news that may lead to disaster. Bethany understands the importance of planning for retirement, that is why she suggests lowering your term no matter when you refinance.
Her Explanation: