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Save tens of thousands of dollars by choosing a 15-year mortgage instead of a 30-year term. Your monthly payment will be higher, but cutting the time of the loan in half cuts off years of interest charges. Plus, interest rates are lower most of the time for loans with shorter terms.
Say your annual percentage rate is 7 percent, and you choose a 15-year fixed-rate mortgage over a 30-year mortgage. For every $100,000 you borrow from the bank, you’ll save $75,000 in interest.
It may be tempting to stretch your loan out over 30 years. After all, who doesn’t want to keep their monthly mortgage payment to a minimum? Sometimes, though, you have to spend money to save money.
All the best,
Timben
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