Is a 15-Year Mortgage Right for your Destin FL Real Estate Purchase?
Many buying Destin FL real estate are choosing to pay off their homes in 15 years even though it may mean substantially higher payments. According to figures from CoreLogic, a consumer, property and financial information provider, for the period from January through June 2010, 26% of homeowners who refinanced chose a 15-year mortgage. The figures are up from 2009, when 18.5% of those refinancing chose a 15-year mortgage and in 2007, only 9.4% chose this a 15-year mortgage. The owners of Destin FL real estate are opting for the shorter time frame for paying off mortgages due to the low interest rates. This decrease means the difference is not as much between the current loan being paid and the 15-year mortgage.
The historically low rates, which are currently around 5%, are one of the deciding factors. Allowing those who own Destin FL real estate to pay the principal of the loan at a quicker rate also means that the borrower’s way of thinking has changed. The normal, only a few years ago was to take on a huge mortgage, use the money that would have been put in the house and put it into stocks and bonds. The mortgage and the home were considered part of the investment. Today, it has shifted to paying off the mortgage and not carrying a lot of debt.
For Destin FL real estate owners this also means saving interest over the life of the loan. Averaging about $450 to $500 more per month, depending on the rate of interest being paid, the loan is paid off twice as fast. Those choosing this option are typically older and have more income and not as many expenses as younger homeowners. They are more financially stable and plan to stay in the home for a prolonged period.
For those who do not have the financial stability, keeping the 30-year mortgage while doubling up on payments when possible is an option. Even a $100 more in payments each month can result in the payoff the mortgage in 25 years rather than 30 and for Destin FL real estate owners, the interest saved can be quite substantial.