15-Year VA Fixed Conforming Mortgage, Home and Mortgage Center, 15 year fixed mortgage rates.#15 #year


15-Year VA Fixed Rate Mortgages

Take rising rates out of the equation with this predictable, monthly payment plan.

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

OUR GREAT RATES

This payment example assumes a loan with pointsthat is intended to be used to purchase a property with a loan amount of $ and an estimated property value of . The property is located in Alexandria, VA and is within Fairfax county. The property is an existing single family home and will be used as a primary residence. The rate lock period is 60 days and the assumed credit score is .

At a interest rate, the APR for this loan type is . The monthly payment schedule would be:

  • payments of $ at an interest rate of
  • payment of $ at an interest rate of

If an escrow account is required or requested, the actual monthly payment will also include amounts for real estate taxes and homeowner’s insurance premiums.

FEATURES BENEFITS

  • Predictable payments
  • Faster payoff
  • Free 60 day rate lock
  • Low down payment

• For home purchases or refinancing

• VA’s 2017 Loan Limits are the same as the Federal Housing Finance Agency’s limits – 2017 Loan Limits (Effective January 1, 2017). Learn More

• Offers not available on investment properties

Applicant is responsible for VA funding fee.

VA Mortgages: The maximum loan amount for a VA loan is the VA County Loan Limits. Can exceed VA County Limits to finance the funding fee on purchases only. Amount of loan will also be determined on available entitlement.

Funds must be used to purchase or refinance a property that will be the primary residence. Refinances of existing VA-guaranteed for purposes of lower interest rate also allowed (is not required to be primary residence).

For purchase applications, please submit a copy of your fully signed ratified purchase agreement to [email protected] in a timely manner to ensure PenFed can meet your closing date.

The applicant is responsible for the following fees and costs at the time of closing: Origination fee, appraisal fee, tax service fee, CLO access fee, title fees, transfer tax fees, credit report fee, flood cert fee, recording fee, survey if required and work verification fee, escrow reserves and interest due until first payment, other cost may be included due to program specific circumstances. This is not intended to be an all-inclusive list.

Escrows may be waived if LTV is 80% or less in all states.

If you withdraw an application that was locked and reapply within 30 days, the new application is subject to worst case pricing.

All rates and offers are in effect as of , offered for a limited time and subject to change without notice. Restrictions apply to existing PenFed mortgage borrowers. Other restrictions may apply. Contact your PenFed mortgage consultant for any applicable additional restrictions and details about your loan. To receive any advertised product you must become a member of PenFed by opening a share (savings) account. Federally insured by the NCUA.

We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.

ARM vs Fixed Rate Mortgages: Which One Should You Choose?

15 year fixed mortgage rates

With mortgage interest rates at an all-time low you’re probably thinking about finally taking the big leap and becoming a homeowner or refinancing your existing home to a lower interest rate. However, the age-old question looms in front of you…which mortgage should I choose, an ARM or a fixed-rate mortgage?

The answer: it depends on your needs. While there are pros and cons to both mortgages, the real question is not which mortgage is better, but which mortgage will suit my needs.

Let’s take a look at both an ARM and fixed-rate mortgage and then you can decide which option is going to afford you your dream home or that tantalizing interest rate that will have you running to refinance your home.

Adjustable-Rate Mortgages

Adjustable-rate mortgages or ARMs have interest rates that adjust over a period of time. ARMs have had a notoriously bad reputation because of the mortgage meltdown and subsequent recession.

While this reputation was justified in the past, most of those exotic ARMs no longer exist. Today, financial institutions offer hybrid ARMs—like PenFed’s 5/5 ARM, which has a fixed-rate for five years and then the rate adjusts once every five years. This is a unique mortgage product as most ARMs adjust annually after the initial fixed terms.

The thought of an adjustable interest rate probably has you fearing skyrocketing monthly mortgage payments. Fear not, all ARMs have caps—a limit on the amount the interest rate can adjust—and ceilings—the highest the interest rate is allowed to become during the life of the loan. Using PenFed’s 5/5 ARM as an example, the initial interest rate will change every five years by no more than two percentage points up or down (the cap). This rate will never exceed five percentage points above the initial rate (the ceiling).

Fixed-Rate Mortgages

A fixed-rate mortgage provides a reliable and fixed monthly payment for the life of the loan. Because your total mortgage payment remains stable from month to month, homeowners can easily budget their monthly expenses.

Financial institutions offer various fixed-rate mortgages including the more common fixed-rate mortgages: 15, 20, and 30-year. Out of the three the 30-year fixed is the most popular mortgage because it usually offers the lowest monthly payment. However, the lower monthly payment comes at a cost of paying more in interest over the life of the loan.

Some Considerations

So, now that you know a little more about ARMs and fixed-rate mortgages here are a few things you should consider when making a decision about which mortgage will best suit your needs:

  • How long do you plan to stay in your home? If you don’t plan to stay in your home for the long haul, you may want to consider an ARM, which has a lower interest rate than the 30-year fixed and you save big money in interest charges. If you move or refinance within five years before the interest rate adjusts you can avoid a payment hike. Conversely, if you’ve found or are already in the home of your dreams, a fixed-rate mortgage makes more sense and will provide you stable payments for years to come.
  • What can you afford? Knowing how much you can afford to pay month to month in mortgage payments will also help you decide between an ARM or fixed-rate mortgage. If you’re working within a tight budget, the ARM may be a more attractive option since the payments will be lower than a 30-year fixed. But, unless you anticipate a raise or another source of added income, ask yourself if you’ll be able to afford your mortgage payment when the ARM’s interest rate increases. If not, don’t take the risk. Go with the fixed-rate mortgage and get stable monthly payments.

The Takeaway: When it’s all said and done, the goal is to get you into the home of your dreams or refinance your existing home without breaking your pockets. Both the ARM and fixed-rate mortgage are products that will help you reach your goal. However, the path you take to get to your goal depends on which mortgage will suit your needs.

15 year fixed mortgage rates

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30-Year Mortgage vs, 15 year mortgage.#15 #year #mortgage


30-Year Fixed Mortgage vs. 15-Year Fixed Mortgage

15 year mortgage

It s that time again, where I take a look at a pair of popular mortgage programs to determine which may better suit certain situations.

Today, we ll compare the 30-year fixed mortgage and 15-year fixed mortgage, two of the most commonly utilized mortgage products available.

While it s impossible to universally choose one over the other, we can certainly highlight some of the benefits and drawbacks of each.

30-Year Fixed Mortgages Are Much More Popular

The 30-year fixed mortgage is easily the most popular loan program available today. Around 70% of all mortgages are 30-year fixed products, whereas the percentage of mortgages that are 15-year fixed loans is roughly 15%.

Over time this number can fluctuate, but this should give you a good idea of how many borrowers go with a 30-year vs. 15-year mortgage.

If we drill down further, about 90% of purchase mortgages are 30-year fixed loans, and just about six percent are 15-year fixed loans. But why?

Well, the simplest answer is that the 30-year is cheaper, much cheaper than the 15-year, because you get twice as long to pay it off.

Most mortgages are based on a 30-year amortization, meaning they take 30 full years to pay off (mortgage term).

And the 30-year fixed never adjusts for that entire duration, making it one of the most simple and straightforward loan programs out there.

In short, it s safe and easy to wrap one s head around, not to mention affordable due to that long term, and as such very popular. This is why it s heavily advertised and touted by most housing counselors and mortgage lenders alike.

With the 30-year, you can afford more house, which explains that 90% market share when it s a purchase. The 15-year fixed market share is significantly higher on refinance mortgages because borrowers don t want to restart the clock once they ve already paid down their loan.

Despite the overwhelming popularity, there must be some drawbacks to the 30-yr, right? Of course there are

15-Year Mortgage Rates Are Lower

15 year mortgage

First and foremost, you pay a premium for a 30-year fixed vs. a 15-year fixed in the form of a higher interest rate.

Put simply, because you get more time to pay off the mortgage, there is a cost associated. After all, lenders are agreeing to give you a fixed rate for double the amount of time, which is certainly a risk for them, especially if interest rates rise during that period.

For that reason, you ll find that 15-year mortgage rates cost quite a bit less than those on a 30-year product. In fact, at the time this was written, mortgage rates on the 30-year fixed averaged 4.63% according to Freddie Mac, while the 15-year fixed stood at 3.82%.

That s a difference of 0.81%, which is certainly very significant and should not be overlooked. So in general, you may find that 15-year mortgage rates are about 0.50% 0.75% lower than 30-year fixed mortgage rates.

I charted 15-year fixed mortgage rates since 2000 using Freddie Mac annual averages, as seen above. Since that time, the lowest spread compared to the 30-year was 0.31% in 2007, and the highest spread was 0.88% in 2014.

In the year 2000, the 15-yr mortgage rate averaged 7.72%, while the 30-yr was a slightly higher 8.05%.

In 2016, these rates were 2.93% and 3.65%, respectively. So the 15-year has been enjoying a wider spread lately, though that could narrow over time.

But before you get ahead of yourself, know that the lower rate on the 15-year fixed comes with a higher monthly mortgage payment because you have 15 fewer years to pay it off.

Monthly Payments Are Higher on 15-Year Fixed Mortgages

15 year mortgage

On a $200,000 mortgage, which isn t necessarily that large, the monthly mortgage payment would be $432.52 higher on the 15-year fixed mortgage because it s paid off in half the amount of time.

So despite the lower interest rate on the 15-year fixed, the monthly payment is still significantly higher. Take a look at the numbers below, using those Freddie Mac average mortgage rates:

30-year fixed payment: $ 1,028.88 (for rate of 4.63%)

15-year fixed payment: $ 1,461.40 (for rate of 3.82%)

However, and this is the biggie; you would pay $170,396.80 in interest on the 30-year fixed mortgage over the full term, versus just $63,052.00 on the 15-year fixed mortgage!

That s more than $100,000 in interest saved over the duration of the loan if you went with the 15-year fixed as opposed to the 30-year. Pretty substantial, eh.

You d also build home equity a lot faster, as each monthly payment would allocate much more money to the principal loan balance.

But there s another snag with the 15-year fixed mortgage option. It s harder to qualify for because you ll be making a much larger payment each month, meaning your DTI ratio might be too high as a result. So for some borrowers the 15-year won t even be an option.

Most Homeowners Hold Their Mortgage for Just 5-10 Years

Now obviously nobody wants to pay an additional $100,000 in interest, but who says you will?

Most homeowners don t see their mortgages out to term, either because they refinance, prepay, or sell and move.

So who knows if you ll actually benefit long-term? You may have a well-thought-out plan that falls to pieces in 2-3 years, and those larger monthly mortgage payments could come back to bite you if you don t have adequate savings.

What if you need to move and your home has depreciated? Or what if you take a pay cut or lose your job? Those larger mortgage payments will be more difficult, if not impossible, to meet each month.

And perhaps your money is better served elsewhere, such as in the stock market or tied up in another investment, one that s more liquid, which earns a better return.

Make 15-Year Fixed Sized Payments on a 30-Year Mortgage

Even if you re determined to pay off your mortgage, you could go with a 30-year fixed and make larger payments each month, with the excess going toward the principal balance.

This flexibility would protect you in periods where money was tight, and still knock several years off your mortgage, assuming larger payments were made fairly regularly. And there are always biweekly mortgage payments as well, which you may not even notice leaving your bank account.

In summary, mortgages are, ahem, a big deal, so make sure you compare plenty of scenarios and do lots of research (and math) before making a decision.

Most consumers don t bother to put in much time, but planning now could mean far less headache and a lot more money later.


Best 15-Year Mortgage Rates for June, 15 year mortgage rates.#15 #year #mortgage #rates


Best 15-year mortgage rates for June charge 2.50%

In our roundup of June’s best 15-year mortgage rates, you’ll find several banks offering cut-rate deals on home loans in areas throughout the country.

All of the banks on our list are charging borrowers between 2.50% and 2.625% with no points.

That means you can find a deal that’s at least a quarter of a percentage point below the national average of 15-year home loans — 2.97%, according to our latest survey of major lenders.

These rates are also more than a full percentage point below the average 30-year fixed-rate mortgage cost — 3.73%.

Here are some of the best 15-year mortgage rates banks are offering:

Banks: Top 15-year mortgage rates

About the lenders

AimLoan: Headquartered in San Diego, it enjoys an A+ rating from the Better Business Bureau. AimLoan is a direct lender, meaning that your fees may be lower than if you use a mortgage broker.

RockBottom Mortgage: Gets an A rating from the Better Business Bureau and is headquartered in Des Plaines, Illinois. It charges borrowers a flat fee per loan and doesn’t pay commissions to its loan officers, which keeps your interest rate down.

Sebonic Financial: Headquartered in Charlotte, North Carolina, it has an A– rating from the Better Business Bureau. This online lender makes it convenient to apply for a mortgage by letting you upload the documents required to process your loan through a secure website.

United Mutual Funding Corp.: Gets an A+ Better Business Bureau rating and is based in Brandon, Florida. This direct lender says it will pay you $1,000 cash if you find a better interest rate and fees from another lender.

Credit union deals

While several larger banks are offering great 15-year mortgage rates, it’s worth checking at credit unions and local institutions as well. You may find a better deal.

For example, Teachers Federal Credit Union is offering mortgages at 2.5% with $853.50 in fees to borrowers who live, work (or regularly conduct business), worship or attend school in Nassau County, New York, and some parts of Suffolk County, New York. You can apply in person or online.

And Langley Federal Credit Union is offering mortgages at 2.50% with $495 in fees to borrowers who work or attend school in Virginia or who join a qualifying local organization. It has an A+ Better Business Bureau rating and is headquartered in Newport News, Virginia.

Finding the best mortgage rates

Even if you don’t live in the areas served by these banks and credit unions, their low rates and fees provide a great blueprint to follow. Find a deal like these in your neck of the woods, and you’ll know you’ve found a great one.

Get started by searching Bankrate’s database for the best mortgage rates from scores of other lenders in your area.

What you’ll pay

The biggest drawback to short-term loans like these is that the monthly payments are higher. For a 15-year loan at 2.50%, the principal and interest payment would be $667 a month for every $100,000 borrowed, or $1,334 on a $200,000 loan. With a rate of 2.625%, your principal and interest payment would be $673 a month for every $100,000 borrowed, or $1,345 on a $200,000 loan.

You can use our mortgage calculator to determine the monthly payments for the amount you want to borrow with this or any home loan.

It will also provide a month-by-month amortization schedule that shows how much you’ve reduced your debt and how much you still owe if you want to pay off the loan.

Shorter-term loans are particularly popular with borrowers who want to save tens of thousands of dollars in interest by paying off their loans more quickly.

Qualification

Borrowing requirements vary by lender, but to qualify for these low rates, you’ll typically need to:

  • Be borrowing $417,000 or less.
  • Have a credit score of 740 or better.
  • Be buying a home or refinancing no more than the outstanding balance of your current home loan.
  • Make a down payment of at least 20% if you’re buying.
  • Hold 20% or more of the equity in your home if you’re refinancing.

In addition, some lenders may require you to maintain an escrow account for property taxes and homeowners insurance to get the best interest rate.

I am licensed Loan Officer in all 50 states and i can help you with all your refinancing needs, feel free to contact me at (248)-825-1768


Best 5 Year Adjustable Mortgage Rates: Compare 5, 15 year mortgage.#15 #year #mortgage


5-Year ARM Mortgage Rates

A five year mortgage, sometimes called a 5/1 ARM, is designed to give you the stability of fixed payments during the first 5 years of the loan, but also allows you to qualify at and pay at a lower rate of interest for the first five years. There are also 5-year balloon mortgages, which require a full principle payment at the end of 5 years, but generally are not offered by commercial lenders in the current residential housing market. It is common for balloon loans to be rolled over when the term expires through lender refinancing.

How do 5-Year Rates Compare?

Teaser rates on a 5-year mortgage are higher than rates on 1 or 3 year ARMs, but they’re generally lower than rates on a 7 or 10 year ARM or a 30-year fixed rate mortgage. A 5-year could be a good choice for those buying a starter home who want to increase their buying power and are planning to trade up in a few years, but who wish to avoid a lot of short-term volatility in their payment levels.

When Are Rates The Best?

5-year ARMs, like 1 and 3 year ARMs, are based on various indices, so when the general trend is for upward rates, the teaser rates on adjustable rate mortgages will also rise. Currently rates are low, in-part because the recovery from the recession has been slow the Federal Reserve has bought treasuries mortgage backed securities in order to take bad assets off bank balance sheets drive down interest rates.

5-year ARMs are most often tied to the 1 year Treasury or the LIBOR (London Inter Bank Rate) but it’s possible that any particular ARM could be tied to a different index. These are the most common indices that banks use for mortgage indices:

  • Treasury Bill (T-Bill)
  • Constant Maturity Treasury (CMT or TCM)
  • 12-Month Treasury Average (MAT or MTA)
  • 11th District Cost of Funds Index (COFI)
  • London Inter Bank Offering Rates (LIBOR)
  • Certificate of Deposit Index (CODI)
  • Bank Prime Loan (Prime Rate)

The FHFA also publishes a Monthly Interest Rate Survey (MIRS) which is used as an index by many lenders to reset interest rates.

The initial rate, called the initial indexed rate, is a fixed percentage amount above the index the loan is based upon at time of origination. This amount added to the index is called the margin. Subsequent payments at time of adjustment will be based on the indexed rate at time of adjustment plus the fixed percentage amount, same as it was calculated for the initial indexed rate, but within whatever payment rate caps are specified by the loan terms. Though you pay that initial indexed rate for the first five years of the life of the loan, the actual indexed rate of the loan can vary. It’s important to know how the loan is structured, and how it’s amortized during the initial 5-year period beyond.

Payment rate caps on 5/1 ARM mortgages are usually to a maximum of a 2% interest rate increase at time of adjustment, and to a maximum of 5% interest rate increase over the initial indexed rate over the life of the loan, though there are some 5-year mortgages which vary from this standard. Some five year loans have a higher initial adjustment cap, allowing the lender to raise the rate more for the first adjustment than at subsequent adjustments. It’s important to know whether the loans you are considering have a higher initial adjustment cap.

15 year mortgageIn analyzing different 5-year mortgages, you might wonder which index is better. In truth, there are no good or bad indexes, and when compared at macro levels, there aren’t huge differences. Each has advantages and disadvantages. One of the things to assess when looking at adjustable rate mortgages is whether we’re likely to be in a rising rate market or a declining rate market. A loan tied to a lagging index, such as COFI, is more desirable when rates are rising, since the index rate will lag behind other indicators. During periods of declining rates you’re better off with a mortgage tied to a leading index. But due to the long initial period of a 5/1 ARM, this is less important than it would be with a 1 year ARM, since no one can accurately predict where interest rates will be five years from now. With a 5/1 loan, though the index used should be factored in, other factors should hold more weight in the decision of which product to choose. The index does affect the teaser rate offered.

What Are The Benefits of a 5-Year Mortgage?

  • Lower monthly payment for the first five years of the loan
  • Ability to qualify for a larger mortgage, based on the initial interest rate
  • Ability to refinance into a fixed-rate mortgage if you are unlikely to move anytime soon

What Are The Potential Downsides?

Knowing what type of mortgage you’re getting can be a challenge, since so many things that sound like a good idea are often the things that can cost you the most money.

Though 5-year loans are all lumped together under the term five year loan or 5/1 ARM there are, in truth, more than one type of loan under this heading. Understanding which of these types are available could save your wallet some grief in the future. Some types of 5-year mortgages have the potential for negative amortization.

Negative amortization, to put it simply, is when you end up owing more money than you initially borrowed, because your payments haven’t been paying off any principle. Negative amortization can be especially devastating in times of dropping real estate values, since the total amount you owe on the mortgage is increasing while the value of the property is dropping, decreasing your equity stake. When the value of the property falls below the amount owed, this is called being under water. Some ARM contracts which allow for negative amortization have a cap of 110% to 125% of the initial loan amount. When the loan reaches this level the mortgage automatically converts into a fully amortizing mortgage which requires principal repayment.

Historical Mortgage Rates

The following table lists historical mortgage rates for 30-year mortgages, 15-year mortgages, and 5/1 ARM loans.


Best 15-Year Mortgage Rates for June, 15 year mortgage rates.#15 #year #mortgage #rates


Best 15-year mortgage rates for June charge 2.50%

In our roundup of June’s best 15-year mortgage rates, you’ll find several banks offering cut-rate deals on home loans in areas throughout the country.

All of the banks on our list are charging borrowers between 2.50% and 2.625% with no points.

That means you can find a deal that’s at least a quarter of a percentage point below the national average of 15-year home loans — 2.97%, according to our latest survey of major lenders.

These rates are also more than a full percentage point below the average 30-year fixed-rate mortgage cost — 3.73%.

Here are some of the best 15-year mortgage rates banks are offering:

Banks: Top 15-year mortgage rates

About the lenders

AimLoan: Headquartered in San Diego, it enjoys an A+ rating from the Better Business Bureau. AimLoan is a direct lender, meaning that your fees may be lower than if you use a mortgage broker.

RockBottom Mortgage: Gets an A rating from the Better Business Bureau and is headquartered in Des Plaines, Illinois. It charges borrowers a flat fee per loan and doesn’t pay commissions to its loan officers, which keeps your interest rate down.

Sebonic Financial: Headquartered in Charlotte, North Carolina, it has an A– rating from the Better Business Bureau. This online lender makes it convenient to apply for a mortgage by letting you upload the documents required to process your loan through a secure website.

United Mutual Funding Corp.: Gets an A+ Better Business Bureau rating and is based in Brandon, Florida. This direct lender says it will pay you $1,000 cash if you find a better interest rate and fees from another lender.

Credit union deals

While several larger banks are offering great 15-year mortgage rates, it’s worth checking at credit unions and local institutions as well. You may find a better deal.

For example, Teachers Federal Credit Union is offering mortgages at 2.5% with $853.50 in fees to borrowers who live, work (or regularly conduct business), worship or attend school in Nassau County, New York, and some parts of Suffolk County, New York. You can apply in person or online.

And Langley Federal Credit Union is offering mortgages at 2.50% with $495 in fees to borrowers who work or attend school in Virginia or who join a qualifying local organization. It has an A+ Better Business Bureau rating and is headquartered in Newport News, Virginia.

Finding the best mortgage rates

Even if you don’t live in the areas served by these banks and credit unions, their low rates and fees provide a great blueprint to follow. Find a deal like these in your neck of the woods, and you’ll know you’ve found a great one.

Get started by searching Bankrate’s database for the best mortgage rates from scores of other lenders in your area.

What you’ll pay

The biggest drawback to short-term loans like these is that the monthly payments are higher. For a 15-year loan at 2.50%, the principal and interest payment would be $667 a month for every $100,000 borrowed, or $1,334 on a $200,000 loan. With a rate of 2.625%, your principal and interest payment would be $673 a month for every $100,000 borrowed, or $1,345 on a $200,000 loan.

You can use our mortgage calculator to determine the monthly payments for the amount you want to borrow with this or any home loan.

It will also provide a month-by-month amortization schedule that shows how much you’ve reduced your debt and how much you still owe if you want to pay off the loan.

Shorter-term loans are particularly popular with borrowers who want to save tens of thousands of dollars in interest by paying off their loans more quickly.

Qualification

Borrowing requirements vary by lender, but to qualify for these low rates, you’ll typically need to:

  • Be borrowing $417,000 or less.
  • Have a credit score of 740 or better.
  • Be buying a home or refinancing no more than the outstanding balance of your current home loan.
  • Make a down payment of at least 20% if you’re buying.
  • Hold 20% or more of the equity in your home if you’re refinancing.

In addition, some lenders may require you to maintain an escrow account for property taxes and homeowners insurance to get the best interest rate.

I am licensed Loan Officer in all 50 states and i can help you with all your refinancing needs, feel free to contact me at (248)-825-1768


The 15 vs, 15 year mortgage rates.#15 #year #mortgage #rates


The 15 vs. 30 Year Mortgage Debate: Why a 30-Year Loan Is Better

15 year mortgage ratesAccording to Freddie Mac s most recent survey, there is currently a spread of 0.72% between the 15- and 30-year fixed rate mortgage benchmarks.

I think most people naturally assume that, when it comes to choosing between a 15- or 30-year fixed rate mortgage, the 15-year loan is usually the better option anyway. Considering the current spread, I m sure a lot of folks out there think they d be absolutely crazy to take out a 30-year loan.

All things being equal, a 15-year mortgage allows you to pay off your mortgage twice as fast while saving a significant chunk of money on interest. However,I say the 30-year mortgage is a more logical choice because it offers so many more advantages over its shorter-termed cousin.

Here are several big reasons why I think a 30-year fixed rate mortgage is the more pragmatic choice:

Lower payments. Of course, the biggest advantage of the 30-year mortgage is that it comes with lower payments; the money you save can then be invested or used as you see fit.

More budget friendly. Those lower payments not only take the strain off tight budgets but, if need be, they also allow you to stretch your dollar enough to purchase a more expensive home.

Increased flexibility. About eight years ago, with potential layoffs looming, I refinanced from a 15-year to a 30-year mortgage in order to lower my monthly payments by over 40%. Today, the threat of layoffs are still looming but I sleep a lot better knowing that my mortgage payment is only $600 per month instead of $1000.

More control. With a 30-year mortgage you re almost always free to make additional principal payments necessary to pay off your loan in 15 years without penalty. However, you re never obligated to do so, and can always change your mind as life s circumstances dictate. With the 15-year loan, you re hopelessly committed to giving that extra money to your lender each month whether you can really afford to or not.

Reduced financial vulnerability. By paying your lender that additional principal every month, you may be locking up too much money into your house. While it s true that the shorter loan builds home equity faster, you still need a lender s permission to tap into it with a home equity loan. If you lost your job, it s highly unlikely your bank would agree to give you such a loan, making that equity unavailable when you most needed it.

More opportunity for financial balance. Yes, building home equity and getting that house paid off is a noble goal. However, for young people just starting out, there are often other very important financial obligations that need to be addressed too. The higher payment that comes with a 15-year mortgage makes little sense if it leaves you unable to build an emergency savings account, or contribute anything to your 401(k) plan, IRA, and perhaps your kids college funds.

Bigger tax deductions. I can already feel the nasty emails coming my way: Agreeing to pay more interest in exchange for a bigger tax deduction is like spending a dollar to save a dime! I get it; this should never be the only reason for taking a 30-year mortgage over a 15-year mortgage. However, all things being equal, the larger tax deduction for the 30-year loan does temper the interest savings of a 15-year loan if only a little bit.

Effective inflation hedge. Inflation erodes the value of the dollar over time. As a result, payments made during the last 15 years of a 30-year loan are significantly lower in real terms than the day you first get the loan. That s why banks hate sustained periods of high inflation: folks with longer-term fixed-rate loans end up repaying those loans with dollars that are worth far less than the value of the dollars they originally borrowed.

No matter how you look at it, the faster inflation rises, the less sense it makes to pay off the mortgage early. With that in mind, a 30-year loan is definitely your best opportunity to stick it to the bank. For many people, I suspect that s probably reason enough to choose one.


15 year mortgage #morgage #rates


#15 year mortgage

#

The 15-Year Fixed Mortgage

How a 15-year mortgage stacks up against a 30-year mortgage

For decades, a 30-year fixed-rate mortgage was the standard term for most homebuyers. Now, in a period of new thriftiness, demographic changes and an aversion to taking on more debt than is necessary, the 15-year fixed mortgage is gaining popularity.

Who chooses a 15-year mortgage?

Broadly speaking, there are three types of buyers that tend to choose a 15-year mortgage:

  1. Younger, high-income buyers who are purchasing less house than they could probably otherwise afford. While they might easily qualify for a 30-year mortgage on a more expensive home, they instead choose to take out a 15-year fixed mortgage and save thousands on interest by paying off their loan faster.
  2. Middle-aged buyers who are eager to pay off their mortgages by the time they retire, perhaps so that they will no longer have house payments after they go on a fixed income.
  3. Buyers who refinance their mortgages to pay off their home faster.

The advantages of 15-year mortgage rates

There are several advantages to financing a mortgage over a shorter time period. They include:

  • Lower interest rates. 15-year fixed rates are generally slightly lower than rates on a 30-year mortgage.
  • Less interest paid. Over the life of a loan, you’ll typically pay tens of thousands of dollars less in interest payments on a 15-year fixed mortgage than you would on a 30-year loan.

Comparing the 15-year mortgage to the 30-year mortgage

The difference between a 30-year mortgage and a 15-year mortgage can best be seen by looking at an example. Note: the rates below are used only as a demonstration. We’ll look at a $150,000 mortgage loaned at 5% for 15 years or a slightly higher 5.2% for 30 years. (Longer-term mortgages typically carry a slightly higher rate.)

  • Payments: Calculated monthly payments on the 15-year loan would be $1,186, as compared with $824 on a 30-year loan.
  • Interest: In the first five years of the loans, there isn’t a great difference in the amount of interest you will pay. However, there is a significant difference in the cumulative amount of interest you would end up paying over the life of each loan. In this example, as the buyer, you would be paying approximately $146,000 in interest on the 30-year mortgage and approximately $63,000 on the 15-year mortgage.
  • Tax deduction: Your mortgage tax deduction will be lower on the 15-year mortgage than it would be on the 30-year mortgage. But, that is more than offset by the significant savings on interest.

Apply for a 15-year mortgage with Citizens Bank

Whether you’re shopping for 15-year fixed rates or other fixed rate mortgage options, Citizens Bank has home loans designed to fit your particular needs. You can learn more about our mortgage rates and apply for a mortgage online today. Alternatively, you can contact a Citizens Bank home loan advisor at 1-888-514-2300 for more information.


15 Year Refinance Rates #tila #mortgage


#15 year fixed mortgage rates

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15 Year Refinance Rates

One of the best ways to take advantage of low interest rates is to refinance your 30-year mortgage to a 15-year loan. While doing this might not lower your monthly payment, it will do something even better get your house paid off more quickly, letting you end up with no payment at all in just fifteen years.

How a 15 Year Fixed Mortgage Works

15 year mortgages work similarly to any other fixed rate loan with one important difference they take less time to go away. Every fixed rate mortgage has a monthly payment which does not change over its life. The first part of the payment goes to pay that month s interest. The rest of the payment gets applied to the principal balance. Since you paid off a little bit of the loan, next month you will owe less interest letting more of your payment go to the principal. Over time, the principal portion of your payment goes up while the interest portion goes down until you have completely paid off your loan.

15 year loans have a higher payment than 30 year loans. This higher payment means that there is more money to be applied to your loan balance, letting you pay it off more quickly. As an example, a $200,000 30 year mortgage at 5.25 percent carries a monthly payment of $1,104.41, with just $229.41 going to principal in the first month. A 15 year mortgage at the same rate would have a $1,607.76 payment, but apply $732.76 to the balance. In other words, increasing your payment by 46 percent gives you 219 percent more principal reduction. That is the magic of a 15 year loan.

15 Year Fixed Mortgage Rates

Believe it or not, 15 year loans are even better deals than they may seem. Because they are shorter loans carrying less risk for the bank, they carry even lower interest rates than a traditional 30-year loan. While interest rates and the relationships between 30 and 15 year rates can vary greatly, you can generally expect to pay between 20 and 30 percent less for a 15-year loan than you would for a traditional 30-year fixed rate mortgage. You can always contact a loan broker to get an exact quote, though.

Taking the above example, if a 30-year mortgage cost 5.25 percent, you could expect to find a 15-year loan around 4 percent. This would lead to an even lower payment of $1479.38 just 34 percent more than a 30 year loan s payment.

How to Take Advantage of 15 Yr Refinance Rates

One of the great things about 15 year refinance and purchase mortgages are that they are very easy to find. Many lenders offer them, creating a competitive market. However, they can be a little bit harder to qualify for than a 30 year mortgage because of their higher payment. Since most lenders look at your debt-to-income ratio, you will need more income to qualify for a 15-year loan than to qualify for a 30-year loan.

Other than needing more income, the qualification process for a 15-year loan is similar to that for any other mortgage loan. You will need to have proof of income, bank statements and tax returns handy. Working with a qualified mortgage broker to identify and fix any credit issues before you start the process of applying for a loan will not only increase your chances of getting approved but can also get you a lower refinance rate by making you a more attractive borrower.

Saving Money with a 15 Year Refinance Mortgage

The most exciting thing about a 15-year loan is how much money it will save you. Because it carries a lower rate and you pay it off more quickly than a 30-year loan, you pay significantly less interest. The 30-year $200,000 loan at 5.25 percent will actually cost you $397,587. In other words, you will pay back almost twice what you borrowed. Going with a 15-year loan at low four percent refinance rates will cost you just $266,288 over the cost of the loan, saving you $131,299.

There is a deeper benefit that you realize by taking advantage of today s low 15 year mortgage rates, too. Imagine how much your life would change if you had 15 additional years during which you did not have to make a monthly mortgage payment. What could you do with an additional $1,000 or more of cash in your pocket every month? Would you use it to take an extravagant vacation every year, drive a dream car, save for retirement or do something else?

When mortgage interest rates were over eight percent, very few people could afford to take out a 15-year refinance. With today s low rates, though, more people than ever can afford to take advantage of the benefits that a 15-year mortgage brings. To learn more about 15-year loans and their attractive interest rates, contact a qualified mortgage broker today.


Wells Fargo mortgage – refinance rates – Today – s 15 – 30 year mortgage


#wells mortgage rates

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Wells Fargo Mortgage

From its early days as a stagecoach provider, Wells Fargo has been a part of the American financial landscape for well over 150 years. After the US government took them out of the delivery business in 1918, though, they focused exclusively on banking. Starting out with a single branch in San Francisco, they expanded throughout California and then became a national force through their acquisitions of Minneapolis-based Norwest Bank and Charlotte-based Wachovia. Today, they are one of the world s largest financial institutions and one of America s largest mortgage lenders.

Traditional Fixed and Adjustable Rates

Borrowers looking for a traditional conforming loan of $417,000 or less can take advantage of Wells Fargo s low refinance rates. They have a broad range of fixed and adjustable products including 30-year and 15-year fixed loans as well as three, five, seven and 10 year ARMs which start with a period of fixed interest and then have yearly rate adjustments. While Wells Fargo usually quotes their interest rates with the payment of one discount point, they actually offer a range of different options.

Wells Fargo s traditional refinance loans come with a broad range of customer-friendly terms. You can make your fixed-rate loan payments more manageable by taking advantage of the Interest only and temporary interest-buydown options. Adjustable rate mortgages can also include an interest only payment option. Another important protection that Wells Fargo includes is an adjustment cap. Wells Fargo’s adjustment caps limit not only how much a loan can go up every year but also how much it can go up over its entire life.

Existing Wells Fargo customers can take advantage of their online streamline program. This program has no application, appraisal, or closing fees and works completely online. As long as you can qualify for a loan and do not want to take cash out, this program makes it easy for you to refinance into a lower rate mortgage with reduced paperwork. It even takes advantage of any government programs that will save you money.

Jumbo Refinance Rates

Wells Fargo s financial strength gives them the ability to make jumbo mortgages which are loans over the $417,000 limit that Fannie Mae and Freddie Mac impose on loans that they will be reselling. Like many lenders, their jumbo loans carry higher interest rates than their conforming loans. Unlike other lenders, Wells Fargo s premium is very small, frequently as little as 25 basis points. In other words, if Wells Fargo was issuing 30-year mortgage refinances at 5.00 percent rates, a jumbo refi would be just 5.25 percent.

FHA and VA Streamline and HARP Rates

Borrowers looking to do a streamlined refinance can take advantage of Wells Fargo s many special programs. With FHA, VA and HARP loans, Wells Fargo offers refinances which can cover most Americans even if they cannot qualify for a traditional conforming refinance mortgage.

Wells Fargo s FHA Streamline loans offer an easier process for people who want to refinance their FHA mortgage. They have reduced paperwork requirements, lax credit underwriting terms, require little or no equity, and also offer competitive rates. In fact, some FHA streamline mortgages have lower rates than traditional mortgages.

VA streamlines are even more attractive than FHA loans in that they offer all of the same benefits but with no requirement for mortgage insurance. While they are limited to veterans and active-duty service people who already have VA mortgages, the savings that borrowers can achieve by taking out a VA streamline refinance are significant. If a borrower qualifies for the Interest Rate Reduction Refinance Loan (IRRRL) program, their paperwork is even easier to complete.

Borrowers with regular Freddie Mac and Fannie Mae mortgages can refinance their mortgages even if they owe more than their homes are worth through the Home Affordable Refinance Program. If you have a good history of being current on your payments and have not yet taken a HARP refinance, you could refinance your loan s mortgage to a new one at today s lower rates through Wells Fargo Mortgage.

Home Equity Rates

Wells Fargo was an innovator in home equity lending, offering one of the first Home Equity Line of Credit (HELOC) loan products ever. Today, they offer traditional home equity loans, flexible HELOCs, and a unique Home Asset Management Account. This account combines a Wells Fargo mortgage with a Wells Fargo HELOC to let you have a single point of contact for both your mortgage and your HELOC. It also offers a choice between traditional payments and interest-only payments to let you manage your monthly cash flow.

Wells Fargo has a long history of leadership in financial services. Their wisdom in avoiding sub-prime lending led them to be one of the strongest banks coming out of the real estate bubble and positioned them to be one of the strongest lenders in the market. Whether you need a 3/1 ARM, a 30 year HARP refinance or you need to tap into your home s equity through a HELOC, they have a mortgage product that can serve your needs. You can learn more about their offerings and rates by visiting their website at https://www.wellsfargo.com/mortgage/ and exploring the information available there.


15 Year Refinance Rates #jumbo #mortgage #calculator


#15 year fixed mortgage rates

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15 Year Refinance Rates

One of the best ways to take advantage of low interest rates is to refinance your 30-year mortgage to a 15-year loan. While doing this might not lower your monthly payment, it will do something even better get your house paid off more quickly, letting you end up with no payment at all in just fifteen years.

How a 15 Year Fixed Mortgage Works

15 year mortgages work similarly to any other fixed rate loan with one important difference they take less time to go away. Every fixed rate mortgage has a monthly payment which does not change over its life. The first part of the payment goes to pay that month s interest. The rest of the payment gets applied to the principal balance. Since you paid off a little bit of the loan, next month you will owe less interest letting more of your payment go to the principal. Over time, the principal portion of your payment goes up while the interest portion goes down until you have completely paid off your loan.

15 year loans have a higher payment than 30 year loans. This higher payment means that there is more money to be applied to your loan balance, letting you pay it off more quickly. As an example, a $200,000 30 year mortgage at 5.25 percent carries a monthly payment of $1,104.41, with just $229.41 going to principal in the first month. A 15 year mortgage at the same rate would have a $1,607.76 payment, but apply $732.76 to the balance. In other words, increasing your payment by 46 percent gives you 219 percent more principal reduction. That is the magic of a 15 year loan.

15 Year Fixed Mortgage Rates

Believe it or not, 15 year loans are even better deals than they may seem. Because they are shorter loans carrying less risk for the bank, they carry even lower interest rates than a traditional 30-year loan. While interest rates and the relationships between 30 and 15 year rates can vary greatly, you can generally expect to pay between 20 and 30 percent less for a 15-year loan than you would for a traditional 30-year fixed rate mortgage. You can always contact a loan broker to get an exact quote, though.

Taking the above example, if a 30-year mortgage cost 5.25 percent, you could expect to find a 15-year loan around 4 percent. This would lead to an even lower payment of $1479.38 just 34 percent more than a 30 year loan s payment.

How to Take Advantage of 15 Yr Refinance Rates

One of the great things about 15 year refinance and purchase mortgages are that they are very easy to find. Many lenders offer them, creating a competitive market. However, they can be a little bit harder to qualify for than a 30 year mortgage because of their higher payment. Since most lenders look at your debt-to-income ratio, you will need more income to qualify for a 15-year loan than to qualify for a 30-year loan.

Other than needing more income, the qualification process for a 15-year loan is similar to that for any other mortgage loan. You will need to have proof of income, bank statements and tax returns handy. Working with a qualified mortgage broker to identify and fix any credit issues before you start the process of applying for a loan will not only increase your chances of getting approved but can also get you a lower refinance rate by making you a more attractive borrower.

Saving Money with a 15 Year Refinance Mortgage

The most exciting thing about a 15-year loan is how much money it will save you. Because it carries a lower rate and you pay it off more quickly than a 30-year loan, you pay significantly less interest. The 30-year $200,000 loan at 5.25 percent will actually cost you $397,587. In other words, you will pay back almost twice what you borrowed. Going with a 15-year loan at low four percent refinance rates will cost you just $266,288 over the cost of the loan, saving you $131,299.

There is a deeper benefit that you realize by taking advantage of today s low 15 year mortgage rates, too. Imagine how much your life would change if you had 15 additional years during which you did not have to make a monthly mortgage payment. What could you do with an additional $1,000 or more of cash in your pocket every month? Would you use it to take an extravagant vacation every year, drive a dream car, save for retirement or do something else?

When mortgage interest rates were over eight percent, very few people could afford to take out a 15-year refinance. With today s low rates, though, more people than ever can afford to take advantage of the benefits that a 15-year mortgage brings. To learn more about 15-year loans and their attractive interest rates, contact a qualified mortgage broker today.