Deciding between a 30-year fixed and a 15-year fixed mortgage can be a tough choice. While one answer clearly won’t apply to everyone, there are three questions you should ask yourself when deciding which plan is the best fit for you:
1. How long do you plan to stay in this home? Short-term durations don’t usually warrant a shorter mortgage term.
2. Are you comfortable with the payment increase on a 15-year mortgage? You may feel a little bit of ‘sticker shock’ when quoting a 15-year fixed mortgage, as compared to a 30-year fixed mortgage. Essentially, you’d be paying the mortgage in half the time, so your monthly payments will be much higher.
Knowing your current expenses should be pretty easy, but nobody can predict the curveballs that life throws.
3. What other expenses do you have now, and how might that change in the future? Knowing your current expenses should be pretty easy, but nobody can predict the curveballs that life throws. Are you starting a career? Do you have children on the horizon? Is their tuition looming? A 30-year plan may be more manageable in these cases.
Each potential buyer has their own unique scenario, but you should ask yourself these three questions and, of course, consult with your loan officer before making the final choice that will impact your payment and your lifestyle every month.
If you have any questions or real estate needs, don’t hesitate to reach out to us. We’d love to hear from you.