5 Reasons to Consider Switching to a 15-year Mortgage

Most homeowners make payments on mortgages with 30-year fixed rates. There’s nothing wrong with that plan, but you might be interested in other options. It may make more sense to refinance and switch to a 15-year mortgage. Let’s look at five reasons why:

You’ll Own Your Home Faster

Cutting the time in half for paying off your home loan means you own your home faster. Of course, you make higher monthly payments, but the payments don’t last as long. This option makes sense if you want to get rid of all your debt by a certain age, such as the age you plan to retire.

You May Lower Your Interest

Since interest adds up over time, you pay more interest over the life of a longer loan. You may also find as you research the refinance process that you can qualify for a lower interest rate, and a lower rate also saves a hefty amount over time.

Your Income Level Changed

If you or your spouse has gotten a new, higher paying job, the smart next financial step is to pay off your debt. The fastest way to do that is through refinancing. With a 15-year mortgage, you can beef up your home equity in less time.

Mortgage Rates Are Low

If you haven’t heard, home mortgage rates have hit an all-time low, and rates for 15-year mortgages are already a little lower on average than 30-year mortgages. Currently, the 15-year mortgage rate is around 3.65 percent. Check your interest rate to see how much you’re paying to help you decide if a refi makes sense.

You’re Ready to Budget

After a few years in your home, you’ve probably created a home budget for paying your bills. If you aren’t maxing out your credit cards, you may find you can afford slightly higher mortgage payments. Be honest about your finances so your refi plan doesn’t cause you to fall behind elsewhere.

If you have more questions about whether it makes sense to switch to a 15-year mortgage, talk with a financial specialist. Go to Refi.com to reach a refinance expert today.

Sources:

https://www.loandepot.com/home-loans/fixed-rate-mortgage/15yearmortgagerates

https://www.bankrate.com/mortgages/analysis/

https://www.nerdwallet.com/blog/mortgages/pros-cons-15-year-mortgage/