Why a 15 Year Fixed Rate Loan is Best for Parkland Homes

Traditionally, only considered financing their mortgages with a 30 year loan. A 30 year adjustable rate loan may begin with the lowest payment, but it can quickly raise much higher. A better option is the 30 year fixed-rate loan, which keeps your payment consistently the same over the life of the loan. With interest rates remaining at historically low levels, many Parkland homebuyers are considering utilizing a 15 year fixed-rate mortgage loan instead of a 30 year fixed-rate loan. But, why is a 15 year fixed-rate loan best for ?

For one thing, you're going to be paying much less in interest payments on with a 15 year FRM (fixed-rate mortgage) than with a 30 year FRM. The latest report from Freddie Mac said that the average interest rate for a 30 year FRM last week was 3.53%. In fact, with the exception of just one week, the interest rate on a 30 year FRM has remained below 4% for the entire 2012 calendar year. The news for 15 year FRM's was even better. The average interest rate for them was just 2.83%, marking the eighth consecutive week it has been below 3% this year.

How much money does this really save you on your Parkland home? A bundle. For example, if you purchased a Parkland home for $250,000 and qualified for the interest rates listed above, you would be paying $1127 per month for a 30 year FRM and $1706 per month for a 15 year FRM. Yes, it does cost a little more each month for the 15 year FRM, but it is worth it. At the end of a 15 year FRM loan, you will have paid $57,096 in interest payments, with $30,495 in just the first five years. However, at the end of a 30 year FRM loan, you will have paid a whopping $155,649 in interest payments, with $41,966 in the first five years. So, not only will you be paying the mortgage on twice as long with a 30 year FRM as you would with a 15 year FRM, but you'll be paying almost THREE TIMES the amount of interest.

Why is a 15 year fixed-rate loan best for Parkland homes? You pay your home off quicker, which means your principal goes down faster and equity has a chance to accumulate faster, and you pay much less in interest payments. All this only costs you a few hundred dollars more each month. If you can manage to make a couple extra payments each year, your Parkland home will be paid off even faster. When you're ready to purchase your Parkland dream home, please . Whether it's a new residence, a vacation home, an investment property or your dream , Parkland and offer some excellent options in all price ranges.

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If you have questions about Somerset or any other , please call Salma Dhanji at (954) 816-0232.

Originally posted on my Parkland Florida Golf Homes and Country Club real estate blog here: .