It is tempting to buy a new home for the first time. But before you jump into it and start hunting for homes you need to know what exactly you are looking for. If you are not prepared this process will become frustrating for you and soon you’ll begin to realize that there is no right option for you, or maybe you’ll end up making an offer on a wrong property.

Searching for a home before you know how to manage your mortgage can become disappointing in the long run. Many people prefer a 30-year fixed rate mortgage plan so that they can stretch their payments over the course of 30 years. However it would be great if more people will focus on 15-year mortgage plan. Why? Let’s take a look.

First of all a short term mortgage plan offers less interest rate. Recently the average interest rate for a 30-year mortgage plan was 4.3% while the interest rate for a 15-year mortgage plan was 3.5% which is almost a point less than the 30-year plan.

In this way the interest rate on a 15-year mortgage plan is much less over the course of the mortgage term. If you borrow $ 150,000, the amount of interest rate that you’ll pay for a 30-year mortgage plan with the interest rate of 4.3% will be much more than the amount you’ll pay for a 15-year mortgage plan with the interest rate of 3.5%.

However every program comes with some benefits as well as drawbacks. When you pay back mortgage in 15-years rather than 30-years it means that you are going to pay huge monthly payments. But you should keep in mind that even if you are going to pay large monthly payments you’ll get rid of your mortgage in shorter time and besides you’ll save a lot on interest rate. Also you can save money by cutting some unnecessary items from your budget; once you’ll decide to save money you’ll start prioritizing it as well.

Also before start looking for homes you should decide a budget and look for homes that fall within that range. When you’ll look for less expensive home it’ll become easy for you to manage a 15-year mortgage plan. There is no harm in choosing a low budget home when you know that you can pay off the mortgage associated with it in shorter time.

If you are using a 30-year mortgage plan currently and you want to switch it you can still do that by making additional payments on your loan.

You can contact Avon Financial today if you need help regarding your current situation. We can guide you and let you know how you can pay off your mortgage in 15-years by making additional payments and the criteria required for it. Call us today to schedule your meeting.

info@avonfinancial.com
Ph:905-216-5563
Fax:905-216-0392

Benefits of a Mortgage Broker
Why Avon Financial
Mortgage Glossary