Six Critical Questions to Ask Yourself When Selecting a 15-Year Mortgage

1. How Much Will I Save on My Interest Rate?
   
   A 15-year mortgage does provide you with a lower interest rate and overall lower interest payment. However, there is a trade-off, because the loan will have a larger monthly payment. For some borrowers this higher payment could mean the difference between being approved or not getting the loan.
   
   
2. Should I Do a 30-Mortgage and Make Extra Payments?
   
   A 15-year mortgage will lock you into a higher monthly payment. However with a 30-year mortgage you are not locked into the higher payment, but can make extra payments thereby reducing the number of years you will have to pay on this mortgage. The important question is are you disciplined enough to actually make these extra payments each month? Only you can answer this question.
   
   
3. Should I get a 30-Year Mortgage to Qualify for a Larger Loan?
   
   A 30-year mortgage will allow you to qualify for a larger loan and enable you to purchase a larger home than you could have afforded with a 15-year mortgage.
   
   
4. What Is the Benefit of More Equity Sooner?
   
   The equity in your home can be used in the future for other borrowing needs. A home equity loan can allow you to pay for college expenses, household item, cars, vacations or other financing needs.
   
   
5. How Long Do I Want to be Obligated on a Mortgage?
   
   Whether you are just starting your family or you are approaching retirement age, you may want to eliminate the obligation of a mortgage sooner. In the case of the young family, you may want to have the mortgage paid off by the time your children start college. In the case of the older couple, you may want to have the mortgage done so you can enjoy your retirement years without the worry of monthly mortgage payments.
   
   
6. Should I Use My Home As a Primary Investment?
   
   When you commit yourself to a 15-year mortgage, with a higher payment amount, you are investing in real estate and perhaps leaving less money for other types of investments. You should ask yourself, “How diversified do I want my portfolio to be” before making this financial commitment that could limit your investment options.

bob.bradshaw@lakewoodhome.net

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