A 15-year fixed rate mortgage is a Florida home loan whereby the interest rate and monthly payment are fixed throughout the term of the loan. Essentially, it has the same attributes as a 30-year loans but for only half the time. The 15-year fixed rate mortgage saves a significant amount of interest, while speeding up equity value in the home. Also, the rate for the 15-year fixed mortgage is at a lower interest that may be as a much as a full percentage point lower. This is an incentive that lenders offer when they can reduce their risk of loan default.
The Advantages of a 15-year Fixed Rate Mortgage
The benefits of a 15-year fixed rate mortgage versus a 30-year term are fairly obvious. Both have fixed rates and fixed payments over the life of the loan. The 15-year fixed is only half the time to have the loan paid in full. Other clear advantages include:
The Drawbacks of a 15-year Fixed Rate Home Loan
Despite the interest saved with a 15-year mortgage, there are a few considerations and disadvantages that borrowers should think about before deciding on the term of their loan. Remember, what may be advantageous for one family, may not be feasible for another.
Is a Florida 15-Year Fixed Mortgage Right for Me?
The choice between a 30-year or 15-year mortgage is one that will affect your financial situation for years to come, so be sure to weigh the pros and cons of each before determining which is best. If your goal is to pay off the mortgage note sooner and you can afford higher monthly payments, a 15-year fixed rate loan might be the best option. On the other hand, the 30-year option may allow you to buy a bigger house or free up cash for other important financial goals.