Should I use a 15 or 30 year mortgage?

Article by R. Joseph Ritter, Jr. CFP® EA

If you are buying a home or considering refinancing your home mortgage, you may be faced with a decision of whether to use a 30 year or 15 year mortgage. For many obvious reasons, the 15 year mortgage is much better to use, that is, if you can make the payments. The interest rate is typically less than with a 30 year mortgage, however, because you are paying the principal over fewer years, the monthly payment is often higher.

With a 15 year mortgage, you will pay significantly less interest on your mortgage and achieve full payoff of your mortgage much more quickly. It is definitely worth considering and strongly recommended, again, assuming that you are able to make the higher payment.

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