30 year mortgages have been the norm forever it seems, but these days 15 year mortgages are gaining ground! With the low interest rates, most of the time by paying just a little bit more each month you can reduce your mortgage from 30 to 15 years. According to the Mortgage Bankers Association, in November 2012, 23% of refinanced homes opted for a 15 year mortgage which is 51% more than in 2011! Back in 2007, only 8.5% of refinances were 15 years.
Why 15 rather than 30 year mortgages? You will save thousands of dollars in interest over the life of the loan as you are paying down more principal each month and in most cases the 15 year interest rate is also below that of the 30 year. A 15 year mortgage is not an option for everyone, but if you can afford it, it is worth considering!