More Borrowers Are Taking Out 15 Year Fixed Mortgages
They are doing this because interest rates are low however I wonder how many are being advised correctly. The reason I say that is because rates are low on 30 year fixed rates too and if you are strapping yourself from a cash flow perspective you could regret it down the road. Ed Conarchy from MortgageMarketGuide.com is always saying “you don’t want to be house rich but cash poor.”
Also, no one knows what the future holds and god forbid you lose your job, a natural disaster, or any other unexpected expense comes along and now you are struggling to make that higher payment. You can still take out a 30 year fixed and amortarize that payment over 15 years. Remember, Uncle Sam picks up part of the difference in rate since mortgage interest is tax deductible. Make sure to deal with a Mortgage Professional and consult your Financial Planner too to make sure whichever option you go with is the best option for you. I can introduce you to a great one if you live in the Fort Lauderdale and South Florida area.
“Some experts take issue with the notion that paying your mortgage down early is a wise strategy. “Since rates are at all-time lows, there’s all the more reason not to take out a 15-year loan,” says Lou Barnes, a mortgage banker in Boulder, Colo. “Over the long term, rates of return on investments will be higher” than the after-tax cost of the borrowed money, he says.”