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15 Year Rates - The Advantages of 15 Year Rate Mortgages

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Many people may believe that there are not a lot of advantages to a 15 year rate mortgage due to the higher monthly payments. A person who buys a home in their middle 20’s can have their home paid off by the time they are 45 years old. This is many years before they even retire. They can spend the rest of their life living in a home rent free. The only costs for their home will be home owners insurance that they will still have to pay every year. If a person has a great job where they are making a lot of money in their early years this is the time to take advantage of a fixed 15 year rate mortgage. Not having the extra concern of paying rent will also give people more time to do the things that they really want to do in their retirement years. They can save up for vacations to go anywhere in the world. People who have a fixed 30 year mortgage will be finishing their house payments while they have been in retirement for many years. Many people even have to take another job even after retirement just to afford their mortgages.

With interest rates at an all time record low gives people another advantage to take on a 15 year rate mortgage. People who already have 30 year mortgages can refinance their loans to reflect a 15 year mortgage. Refinancing to a 15 year rate loan can also save people money since the rates have been an all time low of 3.82 percent, which has not been this low for over fifteen years. People who have 30 year rate mortgages get an average of a 4.37 percent interest rate. It could sometimes take even longer than 30 years to pay off a mortgage due to the higher interest rates. With the cost of inflation going up every year this is another reason to get a mortgage paid off early. Most people do not know what the state of the economy will be in the next 30 years.

The interest rates may be at an all time low but it does not mean that they will always stay that way. Once the real estate market starts to level out the interest rates can go much higher, so this is another reason to take advantage of a 15 year rate mortgage at this time. When buying a home at a fixed 15 year mortgage rate it is better to find a lender that will give a 15 year mortgage rate with no closing costs, pre-payment penalties, hidden fees, or escalating monthly payments. These kind of lending agreements helps a home buyer to know what they are getting into. Some home buyers can buy a home at a 30 year rate plan and then refinance it to a 15 year rate plan after a few years. The best way to get a 15 year rate plan at a lower monthly cost is to buy a cheaper home. Buying a home that is $400,000 will make the monthly payment over $2,500 a month with a 3.99 percent interest rate. Buying a cheaper home for $100,000 will bring their payments down to a more manageable monthly payment.

When a home has been paid off after 15 years the home owner can sale their home and use the money to buy a condominium in an area that they enjoy, such as Florida or Hawaii. Depending on their homes depreciation they can sale their home at a higher cost than what they paid for it. This can give them a lot more extra money. Home owners can also refinance their homes and use the money to pay off their mortgage completely.

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