Borrowers choose the 15 year fixed rate mortgage to both pay less interest over time and to pay off the new mortgage to finance a Florida home much more quickly compared to longer terms. For example, the most popular loan term is the 30 year mortgage because the 30 year fixed rate mortgage has lower monthly payments. The 15 year term however saves the borrowers almost twice the amount of interest paid throughout the life of the loan.
Because the 15 year fixed rate never changes, it’s a popular choice for those who to pay off the loan much more quickly but provides stable monthly payments over the term of the loan. Varying loan terms on any mortgage program will deliver different monthly payments, whether the loan is fixed or variable. Financial planners may suggest that when financing a purchase, to choose the shortest term that is the most comfortable paying each and every month and we agree.
Yet all too often borrowers evaluate the 15 year and 30 year mortgage to finance their Florida home. But there are other choices that might be more favorable based upon each individual’s borrowing needs. Fixed rate programs can range in terms from 10 to 30 years in five year increments. Borrowers can choose between a 10, 15, 20, 25 or 30 year loan term. The longer the term, the lower the monthly payment but the shorter the term the less interest that is paid to the lender.
If you’re deciding whether or not a 15 year fixed is your ideal choice, let’s talk a little further about your situation. How long do you plan on owning the new property? Maybe you have a 30 year fixed rate mortgage and you want to shorten your loan term when refinancing? These and other questions are important to address, so let’s have a conversation, run some numbers for you to see if a 15 year fixed rate loan is your ideal solution.