Author: James Lenn
How to Pay of a 15 Year Mortgage Early and Fast!
Monday, July 28th, 2008 @ 4:07 pm
For many home buyers, the only real decision they have to make is whether to have a 15 or 30 year fixed mortgage rate? Many people wait until they are older before taking on the responsibility of a mortgage so an early payment of this large debt is an important issue to think about. But, before you commit yourself and sign any documents, there are points you need to think about. One point to remember is ensuring that your monthly mortgage repayment remains the same throughout the entire period of the loan.
It is always wise to avoid agreements that do not appear to have any negative aspects because they invariably have but are hidden. Interest rates should remain the same throughout the life of the loan for 15 year fixed rate mortgages.
If you are someone that wants a loan with a regular fixed repayment and no additional charges then this is the main benefit with this type of agreement. My wife and I looked into the loans available with 15 year fixed mortgage rates when we were searching for a home for sale.
Our aim was to pay of the mortgage as soon as we could without getting into trouble with high monthly payments. So in consideration of this point we also looked at longer, 30 year fixed rate mortgages as well.
Still, having a mortgage close to retirement was not what we were looking for, so we decided to try for a loan with a 15 year fixed mortgage. There was obviously very good reasons to finish paying the loan off early.
Taking everything into account we finally went for the easier 30 year mortgage plan instead. Many factors were taken into account when reaching this decision. The main reason was that I found out my wife was pregnant.
Because she wanted to be at home for our child, her income would not only be uncertain but also irregular. The financial commitment per month on the 15 year fixed mortgage rate was just too high. We could see the financial problem of getting in too deep even though there were benefits to a shorter loan period. Despite the trepidation of having a longer term loan, it did reduce the repayments considerably.
We are also able to make extra payments throughout the year to make the principal shrink quicker. It is possible to take years off your loan if you can make a few extra payments during each year. It may be easier said than done, but this approach does pay off eventually. Our first choice would have been to go for the short term 15 year fixed rate mortgage solution but this did not help with our more immediate situation. In retrospect, everything worked out great for us by going down this road.
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