Tuesday, August 15, 2017

Shorter Term - More Savings

When counseling someone about that next Denver home it always seems to be the question: "How much can I afford?".Only the most disciplined clients can stay in the 15 year mortgage range of price, but it can be so worth it. And it can also provide the college tuition for later on, simply by providing the equity in your home. Yet that first/second home is about other things, like family & schools, and neighborhoods. So read on...

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.Denver short term

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.

30 vs 15 in Denver

When the time comes to "discuss your plans" about whether to re-finance, sell that Denver home and move into something that suits your lifestyle, or to access the equity for improvements, I can aim you at professionals who can help. Just CONTACT ME to start the ball rolling.

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