Lower Payment vs. Lower Rate of Interest

However, the lower rate and shorter term come at a monthly cost for borrowers. The difference between the monthly payment for a 30-year fixed and a 15-year fixed can add up to hundreds of dollars more per month for the 15-year fixed. And in these tough economic times, “cash is king.” That is, “cash on hand” is king.

Therefore, many people may be better served by having a smaller mortgage payment under a 30-year fixed – and then saving or investing the extra money. Note, saving and investing rather than spending the extra money is the key point here.

In particular, people who find themselves without a job or who have a pressing financial need would benefit from being able to access these saved funds.

Best Path for all Prospective Borrowers

If you or someone you know is looking to refinance or buy a home, you should remember that a number of attractive mortgage options are still available. However, since an individual’s or family’s mortgage payment is often their largest monthly payment, it’s important to get advice about your unique situation in order to make the best decision.

Call or email today to discuss which options you should consider based on your short- and long-term financial objectives. We can break down the projected costs of those options – not only for the complete term of the mortgage but also for the time you expect to have the mortgage in effect.