If you can easily afford the 15 year payment, do it. Not only do you pay the loan off much more quickly, but you will receive a lower interest rate as well. This serves to create a dynamic that will result in a much accelerated equity build up and a more financially favorable monthly payment.
As an example, a $250,000 mortgage at 4.25% for 30 years would result in a monthly payment of $1,230. That same loan amount at 3.5% for 15 years would result in a monthly payment of $1,787. Then consider that over the life of the loan, the 30 year option would result in total monthly payments of $442,800 vs $321,697 in the case of the 15 year. That’s $121,103 in savings!
For more info, please visit us at www.Ed-Terri.com or email us at smith@realtor.com
Ed & Terri Smith, Broker Owners
RE/MAX Coastal Properties
850-837-5500 x1