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    Home Purchase - Home Refinance
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  • A smart financial move, the 15-yr mortgage

    Minneapolis, MN:  “I own my home free and clear!“. How great would it be to say that? No payments when you retire. No payments while you are also paying for college. Putting money into your 401k vs paying it to the bank. 

    Look into a shorter term mortgage. This is the hottest new trend in home ownership.

    Your parents probably took a 30-year fixed rate FHA mortgage, then tried to pay extra along the way to pay it off early in hopes of having no payments going into retirement.
     
    During the period of 2001 – 2008, it was just the opposite. Many people opted for an adjustable mortgage, interest only mortgage, or even a 40-year mortgage. The reasoning was they would be flipping the house in a few short years at a great profit, so they didn’t really care what the payment was.
     
    Today, what was old is new. Staying in your home and paying it off with a shorter term home loan is very popular. 
     
    Clearly a shorter term loan saves you a lot of money in interest. On a $400,000 loan at 3.5%, the payment (just the loan) is $1,793 per month. The total interest paid is a whopping $246,624! Switch that over to a 15-yr loan at 3.00%, and the payment goes up to $2762 per month, but the total interest is just $97,218. An interest savings of $149,406.
     
    Many people claim they can’t afford the higher 15-yr payment, but for most people, they can. It's is just about choices. Looking at loan applications all day long, I can see that many people could absorb the slightly higher payment with a little discipline and a slight adjustment to their monthly budget.

    Exchange the second new car with a used car, go out to a nice dinner a little less often, a few less $6.00 coffees, and shutting off the cable or satellite premium service all start to add up quickly, giving you one of the best savings opportunities of your lifetime.

    If not a 15-year loan, then at least look at  20-year loan. With a rate of 3.375%, the payment is $2,294, and the total interest payments are $150,614. An interest savings of $96,010 over a 30-yr loan.

    I also hear many people talk about the loss of the interest tax deduction. I have a challenge for you. Can you tell me exactly what your tax write off benefit was this year?  Most people can’t.  The tax deduction is over-rated. Once you figure out how little it really adds up to in real dollars, you’ll quickly see the benefit of paying your home off faster.
     
    Stop pissing money away on a 30-yr mortgage, refinance to a 15-yr mortgage. Earn equity faster, own your home in half the time, and make one of the best financial moves of your lifetime. 

    Perform a Mortgage Check Up

    With our free online mortgage calculations tools, compare your current home loan to today's mortgage interest rate. See what new payments might look like for a new home, a basic refinance, a cash out refinance, or shortening the term of your current loan. NO SSN needed.

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  • Equal Housing Lender, Cambria Mortgage NMLS# 322798. The Joe Metzler team at Cambria Mortgage lends in: Minnesota, Wisconsin, Iowa, North Dakota, and South Dakota only. This is not an offer to lend or to extend credit, nor is this a guaranty of loan approval or commitment to lend. Information here can become out of date, and may no longer be accurate. Products and interest rates are subject to change at any time due to changing market conditions. Not all programs available in all states. Actual rates available to you may vary based upon a number of factors. Consumers must independently verify the accuracy and currency of available mortgage programs. All loan approvals are subject to the borrower(s) satisfying all underwriting guidelines and loan approval conditions and providing an acceptable property, appraisal and title report. © 1998 - 2022, Joe Metzler, NMLS 274132. Cambria Mortgage NMLS 322798