Will 15 year fixed mortgage rates save you money?

Discover how 15 year fixed mortgage rates save you money. 15 year fixed rate mortgages have stunningly low interest rates for loan seekers.

15 year fixed mortgage rates can be a huge money saver, and not many people know this. In fact, with a 15 year fixed interest rate plan, you can save large amounts of money in interest payments.

The 15 year fixed rate mortgages are one of the most classic forms of loans. They will continue to gain popularity among homebuyers who can get the lowest interest rates.

What are the advantages, you ask.........

A huge advantage to 15 year fixed mortgage rates is that you can complete your loan period in a much shorter time than most other loan products.

You will own your home debt free after 15 years, that's something to get excited about!

However the monthly payments for 15 year fixed rate mortgages are higher than normal 30 year loan terms. This is because the loan term is condensed, meaning the bank will charge you more money for your monthly payment due to the shortened time frame.

You will also need to have great credit to get the lowest interest rates available for these mortgages. What's important to remember is that traditionally a buyer would be paying a lot more interest on a 30 year loan period. If you cut the term short to 15 years, the interest in your loan reduces considerably.

Homeowners can save a lot of money with this bargain, and who doesn't want to save money!

You can view this link to calculate how much you can afford:

Cool Mortgage Loan Qualifying Calculator

Another advantage with a 15 year fixed interest rate is that your rates do not fluctuate with changes in market conditions. For instance an interest rate of 4.25% will not change until you pay off the entire loan.

This is excellent for you because you can apply for a refinance of your construction loan (if you don't have a construction to permanent loan), and get a lower interest rate than your construction loan. As good as 15 year mortgages can be, they are not for every situation. In fact, these loans work best for two situations.

The first one is a home buyer with the right amount of income that will help meet the high monthly payments. This allows them to own their home much faster.

The second type of home buyer is an established career person and has enough money to pay off the home in 15 years right before retirement. In both ideal situations, the home buyers will enjoy shorter loan terms and will save a lot of money in interest payments.

Let's look at some of the advantages of a 15 year fixed mortgage rates

1. Home buyers get ownership much quicker than a traditional 30 year mortgage plan.



2. The amount of money you save in interest is almost half of what you pay in a 30 year mortgage.



3. Loans are usually made at a slightly lower interest rate.



4. With a fixed mortgage rate you don't bother worrying about the changing interest rates that markets are susceptible too. These interest rates will last for the entire loan term i.e. 15 years.



5. Equity is built faster because the early payments actually pay down the principal balance, instead of interest on the loan.

If you have already applied for a 15 year fixed interest rate, just make sure you can afford the higher payments that come with the loan. You can check here to find local rates:

BankRate.com Mortgage Search

What if your still not sure 15 year fixed rate mortgages are for you?

Your situation can change and it's also good to know of the negatives related to 15 year fixed mortgage rates.

Some of the negatives are:

• You will have less savings and disposable income due to the fact that your monthly payment will be higher.



• You will not be able to claim much in mortgage interest deductions because you will be paying more principal. Especially note this if you're in a higher tax bracket. Mortgage interest deductions can reduce your tax bracket.

When dealing with a new home building project, performing a transition from a construction loan to permanent financing is your best move. This way, if you use 15 year fixed mortgage rates, you own your home outright in half the time of a 30 year loan.

Moreover you will be saving a lot in interest payments that you would have otherwise paid the bank!

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