Should I Refinance To A 15-Year Mortgage?
- Less investment flexibility: Think of it this way: The more that youre paying out in monthly mortgage payments, the less spare funds that youll have to invest in other ventures. Returning to the above example, you could be saving $430 a month ($5,160/year) that you could instead be investing in stocks, bonds, or other investments that could return 6% 10% a year or more. Case in point: If you were to put these monies in a retirement account each month that delivered a 6% average annual return for 30 years, youd find yourself with a sum of $407 https://rapidloan.net/payday-loans-ri/,000 in-hand at the end. Not too shabby, right? Bear in mind: Although many individuals still look to homes as being historically safe investments, given your personal tolerance for risk and financial goals, you may find that the money is better invested elsewhere. To calculate potential returns on investment using your own numbers, and get a better sense of how to make your money work hardest for you, you may wish to use this calculator from .
- Unavailable for some large homes: As lenders want to make sure that youre able to actually pay them back and to maximize your odds of making timely monthly payments, theyll often decline to extend 15-year mortgages on certain larger and more expensive properties. In essence, these financial institutions ount that theyre willing to lend you so as to improve your chances of meeting your financial obligations and lower the odds that you wind up maxing out your budget. Homeowners struggling to deal with these loan caps would benefit instead by looking to a 30-year mortgage.
It all depends on your current situation and expected financial outlook. Youll want to consider factors such as potential timing, your budget, and your individual or household goals as you contemplate a refinance.