15 YEARS FIXED MORTGAGE RATES
15-year Fixed Rate Mortgages
How To Save Half On Interest Costs
Save $100,000 on mortgage interest costs! Sound impossible? Not really. An old-time mortgage that is once again proving popular allows homebuyers to so just that. It is the 15-year fixed-rate mortgage that lets homebuyers own their homes free and clear in 15 years. And, while the monthly payments are somewhat
higher than a 30-year loan, the interest rate on the 15-year mortgage is usually a little lower, and importantly - the homebuyer pays less than half the total interest cost of the traditional 30-year mortgage. The purpose of this page is to help prospective homebuyers explore the 15-year fixed rate mortgage - a new option for saving on total mortgage interest costs.
Who It's For
The 15-year fixed rate mortgage has proved popular with two very different groups of homebuyers. First, it enables young homebuyers with sufficient income to meet the higher monthly payments to pay off the house before their children start college. They own more of their home faster with this kind of mortgage. Other homebuyers, who are more established in their careers, have higher incomes and whose desire is to own their homes before they retire, may also prefer this mortgage. The 15-year fixed rate mortgage gives them additional financing options using the house's equity. For example, they can easily take out a second mortgage if they want to make use of the equity in their home. But you need not fall into either category to appreciate the savings the 15-year fixed rate mortgage affords homebuyers. Let's take a closer look at some of the pros and cons of this type of mortgage and what savings you may expect.
Advantages
The 15-year fixed rate mortgage offers the qualified consumer five big advantages.
You own your home in half the time it would take with a traditional mortgage.
You save more than half the amount of interest of a 30-year mortgage. On a $75,000 mortgage at 9.5 percent, you save more than $95,000.
Lenders usually offer this mortgage at a slightly lower interest rate than with 30-year loans - typically 0.5 percent to 1.0 percent lower. It is this lower interest rate added to the shorter loan life that realizes the savings for 15-year fixed rate borrowers.
Fixed rate means exactly that - no matter where mortgage interest rates go, the payments for this mortgage stay the same from the first to the last. This helps many borrowers plan their budgets with more certainty. They know that their monthly payments will not increase (or decrease) and throw their financial planning off.
15-year mortgages can be insured by the Federal Housing Administration (FHA) and the Veterans Administration (VA), and with private mortgage insurance.
How To Save Half On Interest Costs
Save $100,000 on mortgage interest costs! Sound impossible? Not really. An old-time mortgage that is once again proving popular allows homebuyers to so just that. It is the 15-year fixed-rate mortgage that lets homebuyers own their homes free and clear in 15 years. And, while the monthly payments are somewhat
higher than a 30-year loan, the interest rate on the 15-year mortgage is usually a little lower, and importantly - the homebuyer pays less than half the total interest cost of the traditional 30-year mortgage. The purpose of this page is to help prospective homebuyers explore the 15-year fixed rate mortgage - a new option for saving on total mortgage interest costs.Who It's For
The 15-year fixed rate mortgage has proved popular with two very different groups of homebuyers. First, it enables young homebuyers with sufficient income to meet the higher monthly payments to pay off the house before their children start college. They own more of their home faster with this kind of mortgage. Other homebuyers, who are more established in their careers, have higher incomes and whose desire is to own their homes before they retire, may also prefer this mortgage. The 15-year fixed rate mortgage gives them additional financing options using the house's equity. For example, they can easily take out a second mortgage if they want to make use of the equity in their home. But you need not fall into either category to appreciate the savings the 15-year fixed rate mortgage affords homebuyers. Let's take a closer look at some of the pros and cons of this type of mortgage and what savings you may expect.
Advantages
The 15-year fixed rate mortgage offers the qualified consumer five big advantages.
You own your home in half the time it would take with a traditional mortgage.
You save more than half the amount of interest of a 30-year mortgage. On a $75,000 mortgage at 9.5 percent, you save more than $95,000.
Lenders usually offer this mortgage at a slightly lower interest rate than with 30-year loans - typically 0.5 percent to 1.0 percent lower. It is this lower interest rate added to the shorter loan life that realizes the savings for 15-year fixed rate borrowers.
Fixed rate means exactly that - no matter where mortgage interest rates go, the payments for this mortgage stay the same from the first to the last. This helps many borrowers plan their budgets with more certainty. They know that their monthly payments will not increase (or decrease) and throw their financial planning off.
15-year mortgages can be insured by the Federal Housing Administration (FHA) and the Veterans Administration (VA), and with private mortgage insurance.
Disadvantages
The disadvantages associated with a 15-year rate mortgage are really the qualifiers that will tell consumers if this is the mortgage for them.
The monthly payments for this type of loan are higher than those for a 30-year mortgage, roughly 10 percent to 15 percent higher per month.
Because borrowers pay less total interest on the 15-year fixed rate mortgage, they lose the maximum mortgage interest tax deduction.
Compare Them Yourself
At right is a comparison of a $75,000 mortgage with terms of 15 and 30 years. We used a 15-year mortgage at a half percent lower rate, which is typical in today's market. As you can see, the 15-year mortgage saves more than $95,000 over the traditional 30-year loan.
30-year at 10 percent 15-year at 9.5 percent
Monthly Payment (Principal and Interest) $ 658 $ 738
First Year Interest Cost $ 7,481 $ 7,023
Mortgage Balance $ 74,583 $ 72,625
Fourth Year Interest Cost $ 7,336 $ 6,244
Mortgage Balance $ 73,052 $ 63,991
Total Interest Cost Over the Life of the Loan $ 161,942 $ 65,970
Difference From 30-year Total $ 0 $ 95,972
HELP
The disadvantages associated with a 15-year rate mortgage are really the qualifiers that will tell consumers if this is the mortgage for them.
The monthly payments for this type of loan are higher than those for a 30-year mortgage, roughly 10 percent to 15 percent higher per month.
Because borrowers pay less total interest on the 15-year fixed rate mortgage, they lose the maximum mortgage interest tax deduction.
Compare Them Yourself
At right is a comparison of a $75,000 mortgage with terms of 15 and 30 years. We used a 15-year mortgage at a half percent lower rate, which is typical in today's market. As you can see, the 15-year mortgage saves more than $95,000 over the traditional 30-year loan.
30-year at 10 percent 15-year at 9.5 percent
Monthly Payment (Principal and Interest) $ 658 $ 738
First Year Interest Cost $ 7,481 $ 7,023
Mortgage Balance $ 74,583 $ 72,625
Fourth Year Interest Cost $ 7,336 $ 6,244
Mortgage Balance $ 73,052 $ 63,991
Total Interest Cost Over the Life of the Loan $ 161,942 $ 65,970
Difference From 30-year Total $ 0 $ 95,972
HELP
Purchase Price / Estimated Value
Please enter the contract price of the property if this is a purchase transaction, current home's estimated value if refinance, or the "as completed" value of the property if this is a construction loan.
Occupancy
Select how your property will be occupied.
Investment Property is a property that is not occupied by the owner and in most cases produces income or is held for gains from appreciation.
Second home, or vacation home, is different from an investment property as it is not rented, but used occasionally by the owners. If you rent out your vacation home for any period of time at all, it's investment property.
Loan Amount
Please enter the amount you want to borrow. If you need help in estimating how much you can borrow, click here
Loan Type
Select the loan type you desire.
Conventional loan is any mortgage loan other than an FHA, VA or an RHS loan.
FHA loan is a loan insured by the Federal Housing Administration (FHA). Most of the FHA programs are designed for first time home buyers and low to moderate income borrowers. FHA loans have lower down payment requirements and are easier to qualify than conventional loans. FHA loans cannot exceed the statutory limit.
VA loan is a home loan guaranteed by the U.S. Veterans Administration. VA-guaranteed loan is available to eligible veterans and unmarried surviving spouses who can show entitlement through a Certificate of Eligibility. Eligible veterans may be able to purchase a home with no down payment and no cash reserve. The VA establishes the maximum loan amounts and eligibility requirements.
Loan Purpose
Please select the purpose for which you are requesting a loan.
Purchase/Rehab is a mortgage loan that combines home purchase and rehabilitation in one loan. It allows you to improve or repair your home at low first mortgage interest rates.
Refinance/Remodel is a mortgage loan to refinance and modernize your home. It allows you to make home improvements, renovate your home, or remodel a home that has been damaged by fire, flood, or earthquake at low first mortgage interest rates.
Rate/Term Refinance, or "No Cash" Refinance is when you only get enough money to pay off your existing loan plus closing costs and no more than that (you may also include the second mortgage if it is more than a year old). For example, if you refinance a property only to change the term of the loan, remove the mortgage insurance, or reduce the rate.
"Cash-Out" Refinance is when the amount of money received from the new loan exceeds the total of the outstanding liens on the property, including first mortgage, second mortgage, lines of credit, closing costs and prepaid expenses. It's called "Cash-Out" because the borrower receives additional cash that can be used for any purpose.
Second Mortgage -- an additional mortgage placed on a property -- can be used for a variety of reasons: debt consolidation, home improvements, the purchase of an automobile, educational purposes, and so on.
Total Gross Monthly Income
Please enter the total monthly income for all persons applying with you.
You can count as income not only your steady employment but also:
Overtime bonus and commissions (average for one - two years);
Net income from self employment;
Social security, veteran's benefits and retirement;
Alimony, child support and income from public assistance programs;
Workmans's compensation or permanent disability payments;
Interest and dividend income;
Rental income after deducting expenses and debt payments;
Income from trusts, partnerships, professional corporations and so on.
The income can be derived from several sources, but it must be supported by documentation and have a high likelihood of continuation.
For your convenience, we have provided a worksheet to help you in determining your qualifying income.
Total Monthly Debt
Your regular monthly debts and obligations may include monthly payments on:
Other real estate loans;
Installment loans (bank loans, auto loans, tuition loans, etc);
Revolving accounts;
Child support and alimony paid to a former spouse.
Include only debt obligations that won't be paid off within the next 10 months. Do not include current rent or other housing expenses, such as utilities, telephone, insurance, etc. Also do not include payments on rental real estate loans that have been deducted from rental income.
For your convenience, we have provided a worksheet to help you determine your monthly debt.
Income Documentation
Can you document your income?
Once you apply, a lender provides you with a detailed list of documentation required to approve your loan. With Easy / No Doc loans little or no documentation is provided to substantiate the borrower's income. These loans are mostly for self-employed borrowers, and are a solution for many borrowers who have income from sources that are hard to verify.
Credit Grade
A borrower will typically fall into one of five categories: A, A-, B, C, or D. Several factors contribute to the credit grade such as past payment history, your credit score, debt ratio and amount of downpayment. The more serious the credit problems, the further the grade decreases.
We have compiled a guide to help you estimate your credit grade -- Credit Grade Guide
First / Second Mortgage Balances
If this is a refinance transaction, second or third mortgage loan please enter your current balance on first and/or second mortgages, if applicable. Your lender can provide an up-to-date report on the amount you owe on your home loan.
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Please enter the contract price of the property if this is a purchase transaction, current home's estimated value if refinance, or the "as completed" value of the property if this is a construction loan.
Occupancy
Select how your property will be occupied.
Investment Property is a property that is not occupied by the owner and in most cases produces income or is held for gains from appreciation.
Second home, or vacation home, is different from an investment property as it is not rented, but used occasionally by the owners. If you rent out your vacation home for any period of time at all, it's investment property.
Loan Amount
Please enter the amount you want to borrow. If you need help in estimating how much you can borrow, click here
Loan Type
Select the loan type you desire.
Conventional loan is any mortgage loan other than an FHA, VA or an RHS loan.
FHA loan is a loan insured by the Federal Housing Administration (FHA). Most of the FHA programs are designed for first time home buyers and low to moderate income borrowers. FHA loans have lower down payment requirements and are easier to qualify than conventional loans. FHA loans cannot exceed the statutory limit.
VA loan is a home loan guaranteed by the U.S. Veterans Administration. VA-guaranteed loan is available to eligible veterans and unmarried surviving spouses who can show entitlement through a Certificate of Eligibility. Eligible veterans may be able to purchase a home with no down payment and no cash reserve. The VA establishes the maximum loan amounts and eligibility requirements.
Loan Purpose
Please select the purpose for which you are requesting a loan.
Purchase/Rehab is a mortgage loan that combines home purchase and rehabilitation in one loan. It allows you to improve or repair your home at low first mortgage interest rates.
Refinance/Remodel is a mortgage loan to refinance and modernize your home. It allows you to make home improvements, renovate your home, or remodel a home that has been damaged by fire, flood, or earthquake at low first mortgage interest rates.
Rate/Term Refinance, or "No Cash" Refinance is when you only get enough money to pay off your existing loan plus closing costs and no more than that (you may also include the second mortgage if it is more than a year old). For example, if you refinance a property only to change the term of the loan, remove the mortgage insurance, or reduce the rate.
"Cash-Out" Refinance is when the amount of money received from the new loan exceeds the total of the outstanding liens on the property, including first mortgage, second mortgage, lines of credit, closing costs and prepaid expenses. It's called "Cash-Out" because the borrower receives additional cash that can be used for any purpose.
Second Mortgage -- an additional mortgage placed on a property -- can be used for a variety of reasons: debt consolidation, home improvements, the purchase of an automobile, educational purposes, and so on.
Total Gross Monthly Income
Please enter the total monthly income for all persons applying with you.
You can count as income not only your steady employment but also:
Overtime bonus and commissions (average for one - two years);
Net income from self employment;
Social security, veteran's benefits and retirement;
Alimony, child support and income from public assistance programs;
Workmans's compensation or permanent disability payments;
Interest and dividend income;
Rental income after deducting expenses and debt payments;
Income from trusts, partnerships, professional corporations and so on.
The income can be derived from several sources, but it must be supported by documentation and have a high likelihood of continuation.
For your convenience, we have provided a worksheet to help you in determining your qualifying income.
Total Monthly Debt
Your regular monthly debts and obligations may include monthly payments on:
Other real estate loans;
Installment loans (bank loans, auto loans, tuition loans, etc);
Revolving accounts;
Child support and alimony paid to a former spouse.
Include only debt obligations that won't be paid off within the next 10 months. Do not include current rent or other housing expenses, such as utilities, telephone, insurance, etc. Also do not include payments on rental real estate loans that have been deducted from rental income.
For your convenience, we have provided a worksheet to help you determine your monthly debt.
Income Documentation
Can you document your income?Once you apply, a lender provides you with a detailed list of documentation required to approve your loan. With Easy / No Doc loans little or no documentation is provided to substantiate the borrower's income. These loans are mostly for self-employed borrowers, and are a solution for many borrowers who have income from sources that are hard to verify.
Credit Grade
A borrower will typically fall into one of five categories: A, A-, B, C, or D. Several factors contribute to the credit grade such as past payment history, your credit score, debt ratio and amount of downpayment. The more serious the credit problems, the further the grade decreases.
We have compiled a guide to help you estimate your credit grade -- Credit Grade Guide
First / Second Mortgage Balances
If this is a refinance transaction, second or third mortgage loan please enter your current balance on first and/or second mortgages, if applicable. Your lender can provide an up-to-date report on the amount you owe on your home loan.
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