Michigan Homeowners: Why You Should Choose a 15 Year Fixed Mortgage
15 Year Mortgage Rates are very low in Michigan, making it a very popular option for borrowers who wish to save thousands over the life of their mortgage.
As interest rates have started climbing over the last few months, the 15 year fixed mortgage has managed to fly below the radar, and remain an unbelievably attractive option for current or soon to be homeowners in Michigan.
Seriously, do you think you will ever be able to borrow hundreds of thousands of dollars for under 4.0% again in your lifetime? It is not a trick question.
Right now there is a once in a lifetime opportunity staring you in the face. So let’s do a brief overview of the 15 year fixed loan.
Comparing 15 Year Fixed Rate Mortgages Shows Incredible Interest Savings
Do you want to pay off your mortgage as quickly as possible? Many people we speak to will actually answer “no” to this question but it’s safe to say they have never done the actual math when they said that.
15 Year Fixed Rate Mortgage 3.43% (.7 points) Total interest paid: $56,122
30 Year Fixed Rate Mortgage 4.39% (.7 points) Total interest paid: $160,123
First off, the interest rates above are not typos. The spread between the 30 year fixed and the 15 year fixed programs is the largest we have ever seen. The 15 year fixed mortgage above saves you $104,000 in interest and this alone makes it a “no-brainer”.
15 Year Fixed Rate Payments Have Their Benefits
Some folks will claim they can’t afford the extra $422 a month it costs to take the 15 year payment stream instead of the 30 year. That is what is so neat about the program. It forces you to set up your household budget around the payment that saves you $104,000 as opposed to being tricked into thinking you are OK and saving money each month. I guarantee there is no easier way to stash almost $7,000 a year away.
Making larger payments helps you build equity faster and means you will be less exposed to being underwater on your home like so many have faced in the last 5-7 years. This has hamstrung many folks from not being able to take advantage of the interest rates when they fell to historic lows.
The math does not lie. Reach out to your local, experienced mortgage broker and have them run comparison amortization schedules for you. You can download our amortization schedules here. Let the numbers speak for themselves and make the move now while this opportunity is here. Give us a call at 248-912-1000.