Discussing a 15 Year Mortgage

Mortgages in the United States are very common. With rising property prices and all around recession mortgages have to be taken by Americans  to own a house.

The period which people opt for a mortgage could be anything from 10 to 30 years. A mortgage for 30 years is a pretty long time and 10 years a little less. Hence a lot many people opt for 15 year mortgages. Mortgages for 15 years serve the purpose of freeing your property from lien early enough in life. With interest rates having come down to historical low levels a 15 year mortgage is an attractive proposition. As things stand out of every five mortgages one is for a 15 year term.

However a 15 year term for a mortgage has some disadvantages. Despite the low interest rates it stands to reason that the monthly outgoings for a 15 year refinance or mortgage option will be much higher as the entire loan is to be liquidated in a shorter period. This higher monthly payment for the mortgage keeps the number of home buyers for 15 year terms lower than other longer periods.

However the charm of a 15 year mortgage is the dream of freeing your home from a lien much earlier. Thus a lot many borrowers opt for a 15-year loan even those who  had taken out a previous mortgage much earlier for a longer term . As they have already paid a part of the principal the increase in monthly outgoings would not be as much as it would have been from the beginning.

However some opponents of the 15 year mortgage feel that paying your mortgage earlier is not a wise decision. They opine that the interest rates are at all-time lows the reason for taking a 15 year mortgage is superfluous. They feel that over the long term, rates of return on investments will be higher as also the after-tax cost of the borrowed money.

However not with standing what is written above a 15 year mortgage is an excellent proposition if you can afford it. The rate of interest is now lower than ever and the biggest chance is to free your property from any form of lien in a much shorter time.

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