A Gem Home Loans expert can answer any questions you may have about a 30-year mortgage in Plymouth, Michigan. Our clients know that we will always be accessible, and ready to address all of their concerns. Buying a home shouldn’t be a stress-filled experience – at least that’s what we believe. When you turn to us, we’ll be ready to take all of the worry and frustration out of the home buying process.

Should You Switch From a 30-Year Mortgage to a 15-Year Mortgage?

30 Year Mortgage Plymouth, MichiganThere are quite a few people out there who find their financial situation has changed dramatically since they signed a 30-year mortgage. Their children may have moved out of the home, they may have changed jobs, or they may have received an inheritance. Whatever the reason, they have a lot more money now than they did when they first moved into their home.

As a result, they may want to move from a 30-year to a 15-year mortgage. They’ll not only pay off the home a lot faster, they’ll also save thousands of dollars in interest payments. If you’re thinking about making the switch, it’s important to realize that, even though you may feel you can afford to do so, this kind of major commitment isn’t for everyone. Here are just a few considerations to keep in mind.

  • The biggest thing to remember is that your monthly mortgage payment is going to rise significantly. You might not have as much of a budgetary cushion. If this worries you at all, then you’ll probably be better off sticking to your current mortgage program.
  • The shorter the term of your mortgage, the more difficult it may be to pay your other debts. If you have loans with higher interest rates, such as a vehicle or credit cards, you might want to consider paying those down before you make any changes to your mortgage.
  • You might actually make more money if you look into other types of investments. Instead of pouring more money into your home each month, you might be able to achieve a larger return by investing elsewhere.
  • Remember that just because you’re paying a monthly mortgage, that doesn’t mean you can’t pay more if you like. You could pay more on your current 30-year loan and still pay it off faster. If your financial circumstances should change down the road, you’ll still have the flexibility of going back to the original monthly payment if necessary. If you commit to a 15-year mortgage, you’ll be locked into paying the higher amount – and lose that flexibility in the process.
  • Always look to the future before you change to a 15-year mortgage. That means looking toward retirement. You might be in a better financial situation if you put that extra money into a retirement account instead of your house.

Talk to Gem Home Loans

It might seem that we’re trying to dissuade you from switching to a 15-year mortgage rather than sticking with your 30-year mortgage in Plymouth, Michigan. We’re really not. What we want you to do is to carefully weigh all of your options first. Making the change might very well be a great decision – we just want you to be 100 percent certain. Let a Gem Home Loans professional help you make the best possible choice. Contact us online or call 248-780-0601.