The unfortunate truth is that the cost of renting or owning a home is a huge expense for a majority of Americans. A 30-year mortgage is a big reason why early retirement is out of reach for many as well.
As mortgage rates have fallen to the lowest levels in U.S. history because of the pandemic--currently between 2% and 3%-- this may not be true anymore.
But how so?
Five Words: Refinancing To A 15-year Mortgage
First, let’s keep in mind that 15-year mortgage loans have always had lower interest rates than longer-term mortgages because these short-term loans are viewed as less risky investments. Naturally, plummeting mortgage rates have then caused 15-year loans to have ultra-low interest rates compared to their 30-year counterparts.
As refinancing homeowners have already paid down a portion of their mortgage, refinancing down to a 15-year mortgage means that their monthly payments are more manageable, especially if their interest rate is lower.
This means that a 15-year refinanced mortgage may allow you to pay lower interest rates for fewer years, and therefore rid yourself of mortgage debt faster.
Enter early retirement or watch your savings and/or investment portfolio grow faster and a huge weight is lifted off your shoulders.
This is why Quicken Loans urges Americans to calculate the cost of a 15-year loan now.
Is Now The Right Time? What If I Already Refinanced?
Here’s how to find out: answer a short Quicken Loans survey to view rates. It’s fast, easy, and your data is secure.