Would Paying Your Mortgage Off 15 Years Earlier
Improve Your Retirement?
With mortgage rates near historic lows, now is a great time for many people to consider trading in their current 30 year mortgage, and the 20+ remaining years and save over a hundred thousand dollars in interest with a 15 year loan.
When you analyze the numbers, the savings can be staggering, you may have to go back and do the math a couple of times before can believe how much you can really save.
There are many benefits of a 15 year loan over a 30 year loan. The 15 year mortgage does not have a credit score adjustment as does its 30 year counterpart. With the 30 year loan, those borrowers that have credit scores below 740 will pay a higher interest rate than those that are above 740. The lower the score is below the 740 mark the higher the interest cost for the loan will be. This is not the case with the 15 year loan.
15 year mortgages that have a loan to value ratio over 80% and require mortgage insurance will have a lower mortgage insurance premium than the same loan on a 30 year term.
Statistics show that borrowers that finance their homes on a 15 year loan have a lower chance of foreclosure than those on a 30 year. The decreased risk of a 15 year loan justifies both mortgage lenders and mortgage insurance companies offering a cheaper product for the 15 year option.
Besides the interest saved by refinancing to a 15 year mortgage, you will have your home paid off 15 years sooner. Imagine 15 years of no mortgage payments. What you do with that freedom is up to you. You can retire early; you can invest the amount you were paying in mortgage payments. Regardless of what you choose, having the freedom to choose will be wonderful feeling.
The graphic below or VIDEO HERE shows how I was able to save one client over $170,000 in interest payments and get his home paid off 15 years sooner. This will make great difference to him in a few years.
Even if he only stays in the home 5-10 years, he will have much more equity than his 30 year loan would have allowed. Give me a call and I will be happy to help you analyze the numbers and see how much you can save.