Although many homeowners opt for 30-year house loans, the 15-year option comes with its fair share of advantages. Whether you are considering refinancing your mortgage or you are taking a house loan for the first time, here’s why you should take a 15-year mortgage.
1. You have a stable job
The disadvantage of getting a 15-year mortgage is the higher monthly payment that comes with it. If you suddenly lose your income, you are likely to face foreclosure. However, if you a stable job or income source, the odds of being financially stable 15 years to come are high. So, such a mortgage would be more appropriate for a government employee than a freelancer. However, if you are a freelancer with a steady client base and workflow, this option might also be for you.
2. You have other financial goals to save for
The regular American spends more on housing than other living expenses. If you would like to save for other things like retirement, a trip around the world or college, shaving off the thousand dollars in home loan interest will bring you closer to your goal.
3. You are about to retire
When retirement hits, you do not want to go in it with pending debts. It’s better to clear your mortgage early so that you can spend on your dreams when you hit the retirement age. Also, if you refinance in your 50s or late 40s, it’s advisable to take a 15-year mortgage so that you will have cleared it by retirement.
4. You can afford the higher monthly payments
If you are earning decent income or you don’t have other demanding financial obligations, a 15-year loan is prudent. The primary disadvantage or short term loans is the high monthly installments. Therefore, if you can afford to make the payments and afford other living expenses, you should consider the short term loans as they attract low interests.Although many homeowners opt for 30-year house loans, the 15-year option comes with its fair share of advantages. Whether you are considering refinancing your mortgage or you are taking a house loan for the first time, here’s why you should take a 15-year mortgage.