Why a 15-Year Mortgage?
The 15-year fixed-rate mortgage is not a popular loan option, but it’s a favorite of many customers looking to pay off their home quickly. Here are a few of the key reasons you might consider this loan option:
- If you plan to stay in your home for several more years
- If you like the peace of mind of a consistent monthly mortgage payment
- If you can get a slight bump in monthly payment, but gain a much lower interest rate, save thousands in interest expense and remove years of mortgage payments
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Questions We Get About 15-year Mortgages
Interest rates go up and down, but why? Many assume that mortgage rates are set by each lender somewhat arbitrarily. The fact of the matter is that these rates are market driven and actually rates tend not to vary significantly from one lender to the next.
Closing costs are largely comprised of fees associated with assessing the value of your home, preparing your title and deed, recording your ownership of the home, and prepaying your homeowner’s insurance and property taxes.
This is probably the most important question you should be asking yourself before you consider a mortgage. Chances are you’re already paying for housing (rent) from month to month so this question often comes down to your ability to make a downpayment and have reasonable financial reserves.
This is a question that is typically easier to answer than people think. What do you currently pay for housing? Is that monthly payment just right or does your budget give you a little room to increase that payment? Typically, we recommend that your housing expense not be greater than 30% of your income and your total monthly debt not exceed 45% of your monthly income.
Absolutely! Really it’s not much different than qualifying for a mortgage as a W-2 employee. Then only difference is that the documents you provide will be a little different.