Frisco Texas Mortgage, Real Estate, Events, and more

Consider a 15-year Mortgage versus 30-year - Benefits are HUGE!

If you are able to make the switch financially from a 30 year mortgage, to a 15 year mortgage, there is a huge benefit. When we refinanced our home, we were looking at a $122K savings in interest. We dropped our rate and the term, and the payment didn't increase much at all.

Moving to a 15 year term may not be for everyone. I strongly suggest working with a professional that will show you the numbers. If you are unable to lower your term due to the increased payment, inquire as to how much additional principal payments you can make in order to decrease the term of your loan 5 to 10 years.

If you have the time to talk about your mortgage situation, then I have the time as well.

It's been over 18-months since I last refinanced my mortgage.The time when I took advantage of the "historical low rates", the best rate I locked in was at 4.375% on a 15-year note. The 30-year note would have been closer to 4.75%. (From a 6% in 2004 and I remembered having to arm wrestle that lender).

Today, when I checked in with my loan officer, John Cannata - the rates are 3.75% for a 15-year note versus 4.25% for 30-year note with a Zero Origination and Zero Discount point. These rates are for FICO credit scores over 720. My husband and I fit this category.

When we refinanced our loan, we refinanced the balance at $165K. Today, my loan balance is approximately $140K (when we made 1 major principle reduction payment recently). But looking at the statement, approximately 60% of our mortgage payment goes towards Principle Reduction instead of 10% when we were at the 30-year mortgage.

I'm glad we did finally decided to refinance the mortgage into a 15-year mortgage. When we talked about it several years ago, we said that we would pay it as if it's a 15-year note. Well... life always happens. But when we are on track to refinance the house to a 15-year mortgage, we will definitely pay that baby off in 15 years! (WORST CASE SCENARIO).

With interest rates as low as they are, the mortgage payment is not as high and as far-fetch like it used to be when we first bought our home 6 years ago. My rate was at 6%.

Consider buying your home or refinancing on a 15-year mortgage rather than a 30-year if you are financially conservative.

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Loreena Yeo - Frisco TX Realtor
Loreena Yeo - Realtor® in Frisco TX
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Copyright © 2010 by Loreena Yeo (3:16 team REALTY)
Original Source: Consider a 15-year Mortgage versus 30-year - Benefits are HUGE!

 

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Are you looking to purchase a Texas home?  Perhaps you love your Texas home but would be interested in refinancing your Texas mortgage to a lower interest rate?  

I'll help you get pre-approved for your Texas home loan and even suggest some very knowledgeable and professional Real Estate Agents in your area of choice.  If you are available to talk, I am available to listen.  Give me a call or visit my website for more details.

Do you want to know all of your mortgage options? Call me today and let's discuss them further.

Texas Home Loan Consultant

Always available for your Texas Mortgage and Home Loan needs!

John R Cannata    P#214.728.0449

NMLS # 322646

Texas Home Loan Expert

Frisco TX Mortgage

      

 

The views expressed on this site are mine alone and do not reflect the views of my employer.

Comment balloon 5 commentsJohn Cannata • October 12 2010 08:31PM

Comments

John - My husband and I have been discussing refinancing and doing a 15 year mortgage.  The thought of having my house paid for in 15 years is very appealing

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) almost 8 years ago

John, thanks for re blogging this as I would have missed it other wise. I agree with the 15 year concept and in 2000, when I refinanced my home we did that. Earlier this year with only 4 years left we decided to remodel and add on...yes...I know kids are gone and we are doing something I usually advise against but it works in my area and we love the neighborhood! This time we actually  chose a 30 year note because we have finally gotten to the point that we know we will paying the note down in advance and will end up paying it off early. It keeps the pmt. down so we can be flexible about paying it back.

Of course I try to let my buyers know that they need to be comfortable with the different financing options and they are best served by using a trusted loan officer in their area. If I was living in Frisco, that would be you!

Posted by Russell Lewis, Broker,CLHMS,GRI (Realty Austin, Austin Texas Real Estate) almost 8 years ago

John, thanks for re blogging this as I would have missed it other wise. I agree with the 15 year concept and in 2000, when I refinanced my home we did that. Earlier this year with only 4 years left we decided to remodel and add on...yes...I know kids are gone and we are doing something I usually advise against but it works in my area and we love the neighborhood! This time we actually  chose a 30 year note because we have finally gotten to the point that we know we will paying the note down in advance and will end up paying it off early. It keeps the pmt. down so we can be flexible about paying it back.

Of course I try to let my buyers know that they need to be comfortable with the different financing options and they are best served by using a trusted loan officer in their area. If I was living in Frisco, that would be you!

Posted by Russell Lewis, Broker,CLHMS,GRI (Realty Austin, Austin Texas Real Estate) almost 8 years ago

Hi John ~ Glad to see this here as I missed it on the first round.  I can't wait to pay off my mortgage and would do a 15 year loan in a minute if I could swing it.

Liz

Posted by Elizabeth Bolton, Cambridge MA Realtor (RE/MAX Destiny Real Estate Cambridge, MA) almost 8 years ago

Michelle - If you can afford the monthly payments, its definitely worthwhile.

Russell - You make a valid point. If you refinance today, the rate between a 15 year and a 30 year is not much (3.75% vs 4.25%). Payment wise, the 30 year is appealing because its low. The 15 year note is appealing because of the overall interest savings and being paid off in 15 years instead of 30. When reviewing the options, I always talk to my clients about their finances. If they want to keep the payment lower (just in case something comes up) then so be it. I'll direct them to how much additional they want to pay in order to shave off several years on their mortgage. Its a matter of discipline. If you can manage it, then leave the payment low and just made additional principal.

As for the improvements to your home... I can go either way. I dont see an issue with using the equity in your home to improve it. Especially if you are planning on living there for several years. Sounds like you've already been there for 10 years so you are not going anywhere too soon. :-)

Liz - The payment increase is not for everyone. If you have a great 30 year interest rate, then you are already on the right track. With rates this low, you cant really go wrong either way.

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 http://TexasLoanGuy.com) almost 8 years ago

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