One last reason to switch to a 15-year mortgage instead of a 30 year, is to gain equity in your home. The whole reason you buy a house or place to live is to own it and the faster you can gain equity, the better! In this case, your home can become a valuable asset to your life. Furthermore, once you own it and can remodel, you can just keep adding to the value.
Now, in terms of fixed or variable interest rates. Along with refinancing to a 15-year mortgage, you want to look out for a fixed interest rate as well. Fixed will help you maintain stability in your payments.
Since you are going to paying for less time, you want to maximize this time to the highest of your ability and do not want to risk getting slammed with an even higher interest rate than you had on your 30-year mortgage! Choosing a variable can make sense in the right market, but the risk factor is honestly not worth it especially in a 15-year plan.
Clearly, choosing a 15 year fixed interest rate loan is the best option for quickly and efficiently paying off your mortgage. While the monthly payment may potentially be a slight bit higher, you will be paying tons less interest, take much less time to pay it off, gain equity in your own personal assets, have more money in the future after those 15 years are over, and guarantee absolute stability in your payments without needing to worry about the market.
Dana George-Berberich is a freelance reporter and novelist. She has written finance articles for newspapers across the country and for companies like Dun & Bradstreet and Bankrate.
