Feb
21
Mortgage Choices for Frederick Buyers
Posted by Chris & Karen Highland under Financing & Mortgages, For Buyers, Frederick Md, Interest Rates
During the last quarter of 2011, mortgage rates plunged. The 30-year-fixed rate is reaching new lows of around 4%. Many homeowners are refinancing and many home buyers are taking advantage of these rates. But many may not realize that the 15-year rate is also attracting some attention.
15-Year Fixed Rate Mortgage
Between October and December 2011, the conventional conforming 15-year fixed rate mortgage averaged 3.30% with about 1 discount point, the lowest 15-year fixed rate mortgage rate in the product’s recorded history. 25% of refinances were from 30-year fixed rates to 15-year fixed rates in the Fall of 2011.
The 15-year fixed rate mortgage is very similar to the 30-year fixed rate, except in the term of the note. You’re compressing the same debt into 15 years instead of 30 years, so naturally, the monthly payment will be more, usually about 50% more. The savings are gained in the amount of interest paid over the 15 years instead of 30 years.
Sample Scenario of two mortgages:
* * * * * *
| $300,000 Home | Monthly Payment | Life of Loan |
Total Interest Paid |
| 30-year-fixed mortgage = 4% | $1432 | $515,609 | $215,609 |
| 15-year-fixed mortgage = 3.3% | $2115 | $380,755 | $80,755 |
| % Difference | 47% higher pmt | 35% savings | 167% savings |
You can use this handy mortgage calculator to see the difference in the two mortgage products. It also has a rent vs. buy calculator.
Contact us for a list of recommended Lenders.
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The Highland Group
Chris & Karen Highland * 301-831-9947
Turning Point Real Estate “ 301-831-8232
email us: isell4u2@msn.com
Text Us: 301-401-5119
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