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Should You Choose a 15-Year or 30-Year Mortgage?
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The biggest difference between a 30-year mortgage and a 15-year mortgage is cash flow. The 15-year mortgage offers more of it, and here’s what you can do with it.
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What’s the difference between a 30-year and a 15-year mortgage?
Between the two of them, the biggest difference is cash flow. With a 15-year mortgage, you’d obviously be paying the mortgage off in half the time. Additionally, the bank would give you a lower interest rate because they’d get their money back in half the time.
For those who can afford it, a 15-year mortgage is a better option.
What does this mean for you as a homeowner? Why should you consider the 15-year mortgage over the 30-year mortgage? Aside from cash flow, there are three other benefits a 15-year mortgage offers:
- Once you end your 15-year mortgage, that gives you more cash to invest in other options like retirement accounts
- You can spend that extra cash flow to increase your current home or lifestyle.
- It gives you extra cash flow to bid higher for a nicer home down the road.
In summation, by compressing your loan period from 30 years to 15 years, you’re ending the loan more quickly, you’ll have a much more favorable interest rate, and it puts you in a better position to have cash for other options down the road.
If you have any questions about this topic, please feel free to give me a call. I’d be happy to speak with you! 23 episoder
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