3 questions to ask yourself before you sign that 15 year mortgage

Some things to consider when choosing a 15 yr. mortgage:

Can I make my payments if my income were to drop in the future?

Am I putting money into an emergency fund or my retirement accounts?

Do I have any other, higher rate loans that need to be paid?

If the answer to any of the above is “yes”, you might want to reconsider.

Getting a lower interest rate will not help you if you cannot make the higher payment in the future.  A better choice might be to take a 30 yr. mortgage and pay on it as if it were a 15 yr. mortgage.  You simply calculate how much it would take to pay it off in 15 yrs. and send in the additional principle with your payment. If you don’t have a calculator, here’s one.

Be sure you indicate that the additional funds are to be applied to principle, otherwise your lender may not know what to do with it and instead put it in your escrow account.

If you want to discuss this with a lender who will look at your total situation, here I am.

 

 

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