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U.S. Economic Factors Cause U.S. Homeowners to Think Differently About Owning a Home


The Advantages of a 15 Year Mortgage Loan to that of a 30 Year Mortgage Loan


September 11, 2009 — Due to current economic factors, the ways of personal finance are greatly changing. This includes financing a home. More people are starting to think of their home as more long-term instead of a starting place to move on from. This also instills thinking of preparing for the future and making sure we are financially secure.


When purchasing or trying to re-finance a house, many people choose that of a low payment amount to that of paying off their mortgage faster. The whole idea of owning a home outright, with no mortgage upon it, is something many Americans don’t always think of. Depending on your loan length; 15 years or 30 years and this will start to enter their minds as well.


A 15-year fixed-rate loan can assist in reaching a goal of being mortgage free and allows you to save thousands on the interest rate. The interest rates on a 30 year loan add up to a lot more. A $200,000 mortgage for 15 years could save about $120,000 against that of a 30 year loan.


There has been much debate about the advantages and disadvantages to paying off a home mortgage. The argument is that those who do not pay off their mortgages have more money to invest elsewhere. This can very well be a good reason but the return rate in the past has been iffy. When you think of each dollar you spend on your mortgage goes towards making that amount grow less and less.

Many others argue that maintaining your mortgage can have benefits with tax deductions. For this to be accurate, you must do a comparison between the basic deduction and an itemized deduction on your tax return for the interest associated with your mortgage.


When thinking of taking out a mortgage, the benefits of a 15-year mortgage loan are quite obvious.


1. It will give you a fixed-rate strategy to help you get rid of the monthly payment.


2. It allows you to add your mortgage into your retirement plan.


3. It is considered a long-term investment with a rate of return that is guaranteed
to help decrease your debt.


4. You will have the added security of knowing you own your home.


5. You will be saving a lot of money compared to a 30 year mortgage loan.



You may also be able to own your home sooner if you can afford to pay a bit more to your payment each month. This can help to reduce your loan length by a few years.




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