Many people who are looking to buy a home consider whether 30 year or 15 year mortgage rates is best for their monthly payments. Many of us are buying homes later in life these days so it is not unreasonable to have the house paid off early. Of course, there are many things to consider before agreeing to anything. A homeowner should pursue, wherever possible, a mortgage with a guaranteed interest rate.

If you are offered a deal that appears to be too good to be true than it probably is. Interest rates remain the same throughout the life of the loan for 15 year fixed rate mortgages. This is of great benefit for anyone that does not like surprises. Both my wife and I decided to research fixed rate mortgages when we started looking at homes for sale.

It was always our intention to clear our mortgage debt as early as we could but we did not want to over extend ourselves at the same time. It became obvious that we had to look at fixed rate mortgages over a longer period and not just 15 year plans. No-one likes the idea of having a mortgage when they are close to retirement, and we were no different, so it was still our hope that a 15 year fixed mortgage rate plan would still be an option. There was a lot of pressure to have the house paid off as soon as possible.

We thought about it long and hard and despite the pressure we decided to go with the 30 year loan plan. Many factors were taken into account when reaching this decision. Finding out my wife was having a baby made making the choice so much easier! The contribution my wife made to the monthly finances would be unreliable since she intended to raise our child at home. Unfortunately, a higher monthly payment was the downside for loans with a 15 year fixed mortgage rate. We could see the financial problem of getting in too deep even though there were benefits to a shorter loan period. The 30 year loan repayments were considerably lower than the 15 year figures.

Being able to make additional lump sum payments during the year means the outstanding loan reduces faster. Those few extra payments also help reduce the number of years you have to pay the loan over. This is well worth it in the long term but it does require some discipline. Our desire for a 15 year fixed rate mortgage was second place to our more immediate needs. Anyway, everything worked out fine despite our hesitancy.

Bookmark to: