With incredibly low mortgage rates, it's no surprise that in the first quarter of 2012, more than 95% of mortgage refinance loans were fixed rates.
What is interesting is that over 30% of refinance loan borrowers chose a short term refinance mortgage.
When refinancing, people usually choose a lower payment with a 30 year fixed mortgage instead of a shorter loan term. However, if you can afford the higher monthly payment, low 15 year mortgage rates can make it easier to eventually become mortgage free.
In the meantime, you could be saving thousands of dollars in interest, compared to a 30 year mortgage. For example, on a $200,000 loan, there's somewhere around $120,000 less interest paid on a 15 year mortgage, compared to a 30 year loan term.
What are the benefits of a short term mortgage?
• Provides a strategy to eventually eliminate your monthly mortgage expense
• Incorporates the retirement of your mortgage into your overall retirement plan
• Long term investment that guarantees a rate of return by reducing your debt
• A future with less financial stress and the security of really owning your home
• 15 year mortgage rates are usually a little lower than 30 year mortgage rates
• Save a large amount of interest expense on a 15 year term instead of 30 years
What is interesting is that over 30% of refinance loan borrowers chose a short term refinance mortgage.
When refinancing, people usually choose a lower payment with a 30 year fixed mortgage instead of a shorter loan term. However, if you can afford the higher monthly payment, low 15 year mortgage rates can make it easier to eventually become mortgage free.
In the meantime, you could be saving thousands of dollars in interest, compared to a 30 year mortgage. For example, on a $200,000 loan, there's somewhere around $120,000 less interest paid on a 15 year mortgage, compared to a 30 year loan term.
What are the benefits of a short term mortgage?
• Provides a strategy to eventually eliminate your monthly mortgage expense
• Incorporates the retirement of your mortgage into your overall retirement plan
• Long term investment that guarantees a rate of return by reducing your debt
• A future with less financial stress and the security of really owning your home
• 15 year mortgage rates are usually a little lower than 30 year mortgage rates
• Save a large amount of interest expense on a 15 year term instead of 30 years