Did you know that the U.S. Census Bureau Statistics website shows that 1 in ever 6 Americans moves each year and that the average American moves over 11 times in their lifetime? There are many costs associated with moving and when it comes to choosing which loan option to choose from it is important for buyers and investors take a more careful look comparing the 15-year to the 30-year mortgage to make sure it matches their financial objectives as well. With so many Americans moving so frequently the importance of conserving your cash on-hand is important for your next home purchase. There are a lot of myths created by financial planners about 15-year versus a 30-year mortage so below I have included a link and excel sheet to help you see the numbers for your self. This will help you compare the two mortgage options and see which will help best fit your needs the next time you purchase a home.
Click here for a neat website powered by myFICO.com which will allow you to compare the cost of the 15-year mortgage to a 30-year.
Click here for a nice Mortgage Amortization Schedule which shows a 15-year versus a 30-year and breaks it down month by month so you can see how much of your payment is going towards principal and how much is going towards interest. For example, if you were to obtain a $100,000 mortgage using the 15-year option you would get a lower interest rate at 3.375%, monthly payment would be $708/month and you would only pay $27,577 of interest over the life of the loan. If you go with a 30-year loan option then you would have a higher interest rate at 4.125%, but your monthly payment would be much less at $485/month. However, over the life of the 30-year loan you would pay over $74,474 over the life of the loan.
Our recommendation is to talk to your mortgage lender and discuss your timeline and financial goals to determine which mortgage option will best fit your needs. Feel free to call us any time at 480-363-2019 if you have any additional questions.