What are the pros and cons of 15-year mortgage loans?
A 15-year mortgage will have a somewhat lower interest rate than a 30-year loan and WILL substantially reduce your overall interest cost.
The catch is that monthly payments are higher, and not everyone can qualify for 15-year financing for that reason. The second catch is that high monthly payments can be a big problem if you lose your job or run into financial difficulties.
An alternative works like this: get a 30-year loan where you have the right to prepay in whole or in part at any time and without penalty. Then make additional prepayments so that you wind up with a 15-year loan.
Because monthly payments are lower than with 15-year financing, it should be easier to get a 30-year loan.
For details and rates, speak with loan officers and real estate brokers.
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