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Five Valuable Reasons to Explore a 15 Year Fix Rate Term Home Loan in California.
A 15 year fixed term mortgage can reduce your over interest paid on a 30 year mortgage. Since there has been a surge in refinance home loans in California, I am presenting 15 and 20 years term to those homeowners that are on 30 year fix FHA home loans. The numbers in some cases make since financially to refinance on a short fix term mortgage. Since it amortizes fully on 15 years, this type of mortgage has a lot of benefits and below we will explore just a few of them.
1) Enjoy Your Retirement Years with a Free and Clear Home:
This will depend if you budget can handle a short term home loan with a 20 or 15 year verses a 30 year. Where as, most people decide to take on a mortgage on a 30 year term to have a lower monthly mortgage payment, a 15 or 20 year may fit within your monthly obligations, at least explore that avenue.
In this case for you, if you are 35 years old then your home will be paid off at 50 years old. There will not be much to worry about when you are living on your Social Security or pension income in your retirement years.
Another consideration is the older you become, the more your health costs will go up. Having costs like this can pile up while having to make a mortgage payment can be financially stressful. For that very reason, not having a mortgage payment after retirement is a bonus.
2) Your Home Will Be Yours Much Sooner, Than Later:
You might think your property is yours the minute escrow closes. However, in reality, it is yours after you have fully paid off the mortgage that is held against the home. Until then, it is yours and the bank holding the lien.
With a 15 year home loan in California, your home will become yours sooner than you know it. Then, you will have have plenty of time to enjoy other things in life like traveling and health cost, knowing you own your home out right, you still will need to ensure your California property taxes are paid each year.
3) You Will Pay Less Interest with a 15 Year Fix Term:
If you elect the 30 year term, there will be twice as many years of interest that you will need to pay. This will more than double the amount you end up having to pay on a home loan, as mortgage interest compounds over the years.
As such, getting a 15 year mortgage will not only decrease the time and the amount borrowed you pay on a loan, saving both time and money can be an amazing wining combination.
4) Offers a Lower Interest Rate:
On most 15 year term mortgages in California, the amount you have to pay in terms of an interest rates is usually lower than a 30 year term. As such, you will be saving money in two ways. First, you will save by reducing the term of the loan and then by the rate being offered. The rate will be determined by your credit and loan to value.
5) Learn To Budget with a 15 Year Term:
You may fear getting a 15 year mortgage. One of the reasons is that you may the payment will be too expensive verses a 30 year.
If you can not afford to make the payment on a 15 year mortgage, you might want to reconsider back to a 30 or 20 year term loan. However, if you can budget the payment, but concerned with a slightly higher payment, don’t be. Pushing yourself to achieve something you truly want is a good thing. You will become a stronger person financially and you’ll have more reason to be proud of your achievement.
A 15 year fix term home loan has many benefits. The main one is simply that you will be able to pay it faster, which means that you will not have worry about it for a long 30 years.
If you would like to explore this option of refinance on a 15 year fix rate term home loan, contact me at 909-503-5600 and let’s get started.
by Nathan Rufty
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