Things to Know about the 15-Year Home Mortgage
Getting a 15-year mortgage has both advantages and disadvantages. Obviously, it will take a short time to be completed. On the other hand, the monthly home mortgage payment required is steep. Is the 15-year home mortgage for you? Read on to get to know the necessary information.
- A 15-year home mortgage has low interest expense. In total, a 15-year home mortgage has lower interest than a 30-year loan.
- You will have fewer worries. The sooner the loan is finished, the fewer worries you will have. A 15-year home mortgage can be finished at the same time that you retire, taking out the need to pay home mortgage beyond your retirement years with Social Security Checks.
- The equity build-up is faster. This is because you pay a big amount in a month, allowing you to have more ownership of your house at a fast rate.
- Make sure you have a sure source of income. Since the monthly payment for a 15-year home mortgage is steep, it is important for you to have a sure source of income. In a few years, you might lose your job or your ability to work. Lenders carefully look into your ability to pay your mortgage faithfully.
- Save up. Because you don’t know what can happen to your or to your job, it is recommended to have savings worth of six months of your home mortgage. This is so you can have a source of payment in case you lose your job or any other source of income.
- Save up some more. Aside from your home mortgage, you should also prepare for your retirement. Make sure that you are preparing your fund for when you don’t have a source of income anymore.
- Watch out for other costs. Be cautious of other costs related to home mortgage such as origination fees and loan servicing. Make sure that you do your research before getting a 15-year loan.
- Evaluate your capacity to pay. Make sure that you can pay for the loan each month. If you are able to sustain your loan and complete it within 15 years, then you will be able to enjoy your house without much worry. If in the middle of paying off your loan, you decide to home refinance, there are costs that you have to pay which may even be more than the interest rate that you have to pay.
