15 Year Fixed Rate Mortgage Midland, Texas
What is a 15 year fixed rate mortgage?
The 15 year fixed rate mortgage is one a handful of conventional mortgage types within the industry. The other types are the 10 year fixed, 20 year fixed and 30 year fixed rate mortgage. The term “conventional” means that the mortgage loan conforms to guidelines from the financial institution and with regards to the size of the loan.
The 15 year “Fixed rate” mortgage comes with interest rates that are lower than that of 30 year fixed loans and won’t change throughout the life of the loan; so your monthly payment will remain the same.
15 Year Fixed Benefits
- A 15 year fixed mortgage allows you to pay thousands less in interest over the course of a loan.
- The term “Fixed” means that your interest rate will never change for the entirety of the loan. Giving you a consistent payment each month.
- It’s 15 years, so you can pay off your mortgage faster.
15 Year Fixed VS 30 Year Fixed
- The obvious difference: The 15 year fixed is paid off in 15 years compared to 30 🙂
- 15 year fixed rate loan has a much lower interest rate compared to the 30 year fixed. The difference can be as much as 0.5% to 1% depending on the economy.
- Because the 15 year mortgage is paid off in 15 years, this means that the monthly payment will be hundreds of dollars more each month depending on the size of the loan.
- Because the monthly payments will be higher, it will make these loans more difficult to qualify for.
- One of the biggest benefits of the 15 year mortgage is that it typically saves homeowners over $100,000 in interest alone over the length of the loan.
15 Year Fixed Mortgage Qualifications
- Maximum loan amount – The loan amount for a conventional 15 year fixed rate mortgage is generally limited to $417,000 for single family homes. However, these limits vary based upon location.
- Minimum down payment – 15 year fixed rate loans will require a minimum of a 5% down payment. If you are wanting to have a smaller down payment, check out FHA loans and VA loans.
Who Should Get A 15 Year Fixed Rate Mortgage?
Typically it’s harder for First-Time home buyers to qualify for a 15 year fixed rate mortgage due to the much higher monthly payment. So this loan type works out really well for those homeowners who can handle a much higher monthly payment and those who want a shorter mortgage term. These are most common for families who are purchasing their second home and don’t want a 30 year mortgage.
Frank Perea is a mortgage broker based out of Midland, Texas and serves clients all throughout eastern Texas including: Odessa Texas, Monahans Texas, Big Springs Texas among others.