Buying our first house
We recently bought our first home and I remember digging all over the internet trying to compare fixed mortgage interest rates and find the best and lowest rate. And while it was more work than just hiring the lender down the street, ultimately it got us a lower interest rate on our mortgage which will yield thousands of dollars of savings over the life of the loan.
Now my goal is to pay the puppy off as soon as possible. I have learned to hate being in debt and can not wait to pay off our mortgage early.
Should you get a 15-year fixed or a 30-year fixed mortgage?
I agree with Dave Ramsey’s philosophy on this one. If you can afford to pay the payments, I suggest getting a 15 year mortgage. Not only will you find that when you compare them with the 30 year fixed rates they are much lower – but you will also save a ton of money over the life of the loan.
An example of a 15-year mortgage vs a 30-year from FPU – (figures based on a 6% APY)
|Loan Amount||Loan Length||Monthly Payment|
So, even though you are paying for half the time of the 30 year mortgage, you only save $550 per month. And after 10 years of paying the 30 year mortgage, you would have paid in over $160,000, but only reduced the loan amount by $36,708!
The sad truth is that most people pay far more in mortgage interest charges over the life of the loan than they do for the actual house. With our current rates being low like they are, things are as bad – but we should still be working to minimize the amount of interest we pay to the mortgage lender and getting a 15 year mortgage is a great way to do that.
And when you get your house (or refinance) I recommend trying to get that house paid of ASAP! I am personally looking forward to the day when my most expensive bill each month is the electric bill. So, I am always thinking about ways and looking for money that can be used to pay down my mortgage quicker.
If you are shopping for a new mortgage or have one and are comparing mortgage rates for refinancing, the tool below can help and be a good starting point…