15 years’ vs 30 years mortgage and why we recommend 15 years at Ductant Group & Associates

When purchasing a home, most buyers fail to look into all of the loan options that are available to them. In today’s market there are several types of home loans ranging from fixed interest rates to balloon interest rates. The most popular of them all is the 30 year fixed home loan. A fixed mortgage is the safest route to go and is typically more advisable to the average buyer depending on what exactly it is you are looking for. I myself always recommend the fixed mortgages to my clients because a fixed mortgage guarantees that your interest rate will remain the same for the life of the loan. This means that no matter how the market changes, you can count on a consistent monthly bill with no surprises. Now between the two fixed mortgage options is where it gets complicated to decide. Both the 15 year and the 30-year mortgage are great options, but the long term benefits that the 15 year mortgage offers outweighs its cousin the 30 year mortgage. Continue reading to see why I recommend 15 year mortgage to my clients.

Pros of 15 year mortgage-Studies show that the average American homeowner will sell their home after 5-7 years. So paying down a loan with a 15 year timeline will get you double the equity then if you sign up for a 30 year mortgage. Which means more money to invest into your next home or just invest all together. Another positive you get with a 15 year mortgage is lower interest rate compared to a 30 year mortgage. The benefits of a lower interest could mean a savings of thousands of dollars for the life of the loan. A 15 year mortgage requires higher monthly payments compared to 30 year mortgages(sometimes as much as 50% more). Which I mentioned earlier would affect the size and at times the neighborhood you would truly be interested in. If you are looking at your home as an investment like you should, taking a temporary hit to be able to flip your profit later should be enough to persuade you to go for the 15 year mortgage. At the end of the day, your home is your biggest investment. When investing you should always look towards the future to determine if it is a good investment or not.