Are you thinking of making a home purchase this 2019? Good for you! Buying a house that you can call your home is one of the ultimate American Dream. Now is the best time to check on your finances and work your way towards educating yourself with the different mortgage programs that can help you in the home-buying process.

There are different types of Home Equity Loans Grand Prairie to choose from, and these can come in fixed-rate or adjustable-rate mortgages. If you’re one of those homebuyers who wants the shortest home loan available, then the 15-year mortgage is for you.

What is a 15-Year, Fixed-Rate Mortgage?

Such home loan allows you to acquire a home purchase which you will then pay within 15 years. If you’re a homebuyer who has the financial capability to pay off a higher amount of mortgage fees monthly, and if you’re after a home loan that you can quickly finish paying for in half of the usual time, then you’ll find 15-year mortgages a good deal.

But before you jump on the 15-year mortgage wagon, it’s best to know the pros and cons of such mortgage type.

Pros of 15-Year Fixed-Rate Mortgages

• Shorter Time To Acquire A House. 15-year mortgages allow you to acquire full homeownership a lot faster than other mortgage types. It means you get to own the house quicker, giving you a sense of fulfillment. Once you’re able to pay your dues regularly within 15 years, you no longer need to worry about mortgages.
• Save A Significant Amount Of Money. Since the risks lenders will face is substantially lower in 15-years mortgages, they will charge their borrowers with lower interest fees. Such mortgage type is also cheaper than 30-years mortgages since you’ll only pay half the interest rates.
• Quickly Build Up Your Home Equity. Shorter mortgage terms won’t only let you finish the loan in a shorter period, but can also build equity faster than other mortgages. The reason is that you’re able to pay down the principal quicker with a higher monthly mortgage and lower interest fees.

Cons of a 15-Year Fixed-Rate Mortgages

• Higher Mortgage Payment Per Month. With 15-year mortgages, one needs to pay a higher monthly mortgage fee – typically up to 50% higher than 30-year mortgages. This can cost homebuyers a couple of hundred dollars more monthly. If you’re running tight on budget, you may have no room to accommodate other needs such as emergencies.

Good Read: How do I save money by using 15-year mortgages?

• Lesser Home Options. You may think that you can buy a more expensive home in half the time when applying for a 15-year mortgage. However, in reality, you’ll be able to acquire a less expensive house than the one you can get with longer mortgages. This means you’ll qualify for a lower maximum loan amount.
• Lower Chances Of Building Up Savings. With an even bigger mortgage bill you need to pay monthly, you may lose your chances of setting aside more cash. Instead of saving up in your bank account or putting it up on your emergency fund, retirement or a 401(k) retirement account, most of your income will now go to your monthly mortgage.

The Bottom Line

If you’re after saving a lot of cash, wants to acquire a home and build home equity faster, then you might want to consider a 15-year fixed-rate mortgage. Just make sure you’re financially stable enough, can afford the high monthly mortgage fees and that you have already taken into consideration the cons of a shorter mortgage.