That means you could save thousands of dollars of interest over the life of your loan by refinancing to a 15-year fixed at current mortgage rates.
Many homeowners often pay more than their required monthly mortgage payment to help lower their principal balance at a faster rate. If your goal is to pay off your mortgage more quickly, this could be the ticket to owning your home free and clear while seizing the opportunity to secure a low rate.
Mortgage applications have increased according to the Mortgage Bankers Association’s weekly mortgage application survey, citing a 9% increase in home purchases from the previous week. If you’re in the market for a new home and plan on staying there long-term, a 15-year fixed may also make sense for your personal budget.
According to Quicken Loans Vice President, Bill Banfield, “The increase in mortgage applications is a bright spot in a spring home buying season that has been late to bloom. While all rates are low right now, the 15-year product is a particularly attractive option for those looking to buy or refinance, with rates sitting almost a full point lower than the 30-year, and the added bonus of saving tens of thousands of dollars in interest over the life of the loan.”
In addition, if you have equity in your home and need to tap into some of that equity to handle big life events, like marriage, college or retirement, a 15-year fixed can help you achieve those goals while cutting your mortgage term to half that of a traditional 30-year fixed.
Many Quicken Loans team members have a 15-year fixed-rate mortgage, and when I mentioned I’d like to spread the great news about today’s 15-year fixed rate, Clayton Closson, a former marketing team member, was happy to tell me why that was his loan of choice:
“I actually refinanced twice,” Closson said. “I originally bought my house with a 30-year fixed. A few years later, I got in touch with a mortgage banker on a whim and wanted to know if refinancing to a 15-year made sense. It did! I knocked about $86,000 in interest off my loan and cut 12 years off the loan (I was in the third year of my 30-year loan). A year later, there was a rate drop and just on the slight chance I could lower my rate again, I contacted my mortgage banker. I didn’t expect it, but he was able to refinance me again, taking another 1/2 percent off my rate and saving me another $9,000 or so. So in the end, two refinances to 15-year fixed loans (I got the VA loan both times), saved me a total of $95,000 in interest and gave me a payment that was still very affordable. Both were great moves on my part and before I know it, I’ll have my house paid off. Can’t wait for that!”
If you’re interested in seeing if you could save money, take advantage of a low interest rate, or pay off your loan faster, you owe yourself a chance to get a Quicken Loans Mortgage Review today!
*30-Year Fixed-Rate Mortgage: The payment on a $200,000 30-year Fixed-Rate Loan at 4.125% and 70% loan-to-value (LTV) is $969.3 with 2.25 points due at closing. The Annual Percentage Rate (APR) is 4.389%. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply.
*15-Year Fixed-Rate Mortgage: The payment on a $200,000 15-year Fixed-Rate Loan at 3.25% and 70% loan-to-value (LTV) is $1405.34 with 2.125 points due at closing. The Annual Percentage Rate (APR) is 3.688%. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply.
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