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15 or 30 Year Mortgage for Your Florida Home?

Question of the Day

Q: Which is better a 15-year or 30-year loan?
A: The 15-year mortgage offers you a chance to save thousands of dollars over the life of the loan. This is because the interest rate is typically lower and amortization is half that of the 30-year loan which means that the total interest paid on the 15-year note as compared to a 30-year note is significantly less because of the shorter borrowing period.

Put another way a 15-year loan accrues principal much more quickly than a 30-year loan so you get to own your house in half the time.

However because you are building equity faster and paying down the loan sooner a 15-year mortgage requires higher monthly payments.

Get a lender to help you calculate the overall savings of the 15-year loan versus the 30-year mortgage. In the end though base your decision on your circumstances and overall financial plan such as whether you are nearing retirement age and also will have to shell out college expenses for children in which case a 15-year loan may not be for you. Remember that your spending habits budget and financial goals should all be considered before making a final decision.

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