Shorter Term – More Savings

Posted by Mary Cox on Thursday, August 17th, 2017 at 6:06pm

Whether you’re refinancing your current home or buying a new one, something worth considering is a 15-year loan rather than a 30-year term. The payments will be a little higher but you’ll get a lower interest rate and you’ll build equity much faster.30348233-250.jpg

Let’s look at an example of a $300,000 mortgage with the choice of a 30-year term with a 3.92% rate compared to a 15-year term with a 3.2% rate. The payments would be $682.28 higher on the shorter term but the equity would be considerably higher even after you adjust for the higher payments.

Another benefit is that the shorter-term loan creates a forced savings situation where the savings on longer term loan might end up being spent rather than being saved and invested.  A conscious decision to pay more in payments could pay big dividends in the future.

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<p>Take Care, </p> <p><img style="float: left;" src="file:///S:/Marketing%20and%20Prospecting%20Systems/Graphics/Signatures/Mary%20Cox%20Sig%20best.jpg" alt="" /></p>

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