Mortgages | Credit | Interest Rates | 15-Year Home Loan Rate

Before discussing the paybacks and drawbacks of the 15-year home loan rate let’s first familiarize you with the terms commonly used in mortgage loans.

• Mortgage- the universal term for the loan you acquire in lending organizations such as the bank or other savings-and-loan organizations.
• Property- the tangible structure that is being financed and acts as the collateral in the agreement
• Lender- the bank or any financial corporation lending the money
• Borrower- loaner that is pursuing an ownership for the property
• Interest rate/mortgage rate- a monetary fee for the money of the lender
• Term- the total number of years where the borrower pays the lender

A borrow for a home loan, more often than not, chooses the 30-year fixed rate as the term for their loans. Though it’s easier to get a loan approval for this type of rate, a borrower, especially one who has a good credit report, should not limit himself to this option. This is because in the past couple of years, the 15-year home loan rate has been better than ever and tends to attract a lot of borrower.

There is no wonder for that since a 15-year home loan rate can do so much for the borrower. The primary benefit of this type of loan rate is that instead of repaying the lender for 30 long years, the borrower can do that half the time. The remaining 15 years can mean tremendous relief for the financial burden being lifted. And there’s a big possibility that the borrower can take ownership of the house even before reaching retirement or before children in the household leave for college. One more advantage in obtaining a 15-year home loan rate is that since the loan is much shorter then the interest rate is much lower as opposed to the 30-year loan rate.

Realistically of course, the monthly payments for the 15-year home loan rate are marginally higher than the payment for 30 years. This is expected given that the ‘normal’ years in payment have been slashed in half. Another drawback in the 15-year loan payment is that getting an approval for this loan is quite challenging. Only after a thorough deliberation and interview can the lender grants a borrower for a 15-year home loan.

It is easy enough to qualify for a 15-year home loan if, first and foremost, the borrower have a great credit report. Make it a point to check credit report as meticulously as possible because any discrepancy can hurt regardless if there’s truth in it or not. If for some reason the borrower takes notice of an inconsistency, immediately report to Equifax, Experian and TransUnion, which are the three major credit report reporting agencies. Another edge for the borrower is his/her employment stability. If the lender finds the borrower’s steady curriculum vitae and perceives that there’s no threat in the borrower losing the job for the next 15 years then the approval can get through.

Once the lender approves the loan to the borrower, it is also mandatory for the borrower to not miss any payment for a much better home loan agreement.