Question:

Should I take a 15 or 20 year fixed rate mortgage?

Answer:

The rate of a 20 year fixed rate mortgage will be higher than the rate of the 15 year FRM; however, payments will be lower and more affordable.

The question of 15 and 20 year fixed rate mortgage loans is not whether they are good to take, but rather can we afford the monthly payment. As with the 15 year FRM, the 20 year fixed rate mortgage allows for repayment of the mortgage before retirement or before your kids start college. A 20 year fixed rate mortgage does carry higher rate than the 15-year fixed rate, but still amortization occurs much quicker than with other fixed rate mortgages.

20 year fixed rate mortgage interest rates will be lower than rates of the 30 year FRM. Compared to 30 and 40 year fixed rate loans, the 20 year fixed rate mortgage is quite a saver. Compared to 15 year FRMs, the 20 year fixed rate mortgage will be more affordable.

However, the difference in monthly payments between the two is not so great. If you can afford a 20 year FRM, you probably can afford a 15 year mortgage, too. Of the two, the 15 year mortgage is the top choice for gaining equity quickly.

Yet again, if you don't want to be paying through the nose for your mortgage, consider a 30 or 40 year terms for an FRM.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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