15 vs. 30 Year Mortgage

If you're preparing to buy a home, you will need to look at not only mortgage interest rates, but also loan types and terms. Your mortgage term is how long you have to repay the loan, and most terms are 15 or 30 years. If you can afford the payment on a 15-year mortgage, the long-term interest savings are great. But the lower monthly payment of a 30-year mortgage could offer you more flexibility if your financial situation changes.

 

A 15-year mortgage pays off your home in half the time of a 30-year loan and saves on interest overall. Borrowers typically pay lower rates for 15-year loans because the shorter term reduces risk for lenders.

 

The shorter term also means that more of your payment goes toward paying down principal, so you can build equity faster than with a 30-year mortgage. The trade-off is a higher monthly payment than a 30-year mortgage – at current rates, about 25-30% higher. 

 

Here is the cliff-notes version of the pros and cons of each loan term:

Alternatives to a Standard Mortgage Payoff?

On the fence between a 15-year or 30-year loan? Some lenders offer 10, 20, or 25 year terms.

There are some other “hacks”, as Gen Z would likely say:  pay one extra mortgage payment a year, divide your monthly payment in two and pay bi-monthly (which chips away at interest faster), or make extra principle payments with bonuses.

This way, if things ever get tight financially, you're not locked into a higher payment. Just confirm that your lender doesn't charge a prepayment penalty.

October 1st - 31st by the Numbers

Everyone's favorite! The data is in and numbers have been officially crunched for October. Below is data broken out by zip code for recent price reductions, pendings, solds, pending back to actives (terminated contracts), and total number of showings for this month.

 

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