I'm in my 4th year of a 15 year mortgage, and I'm selling my home. If I had gotten a 30 year mortgage, would I have more equity by now?
2007-07-08 10:07:45 · 8 answers · asked by bestaimee2151 3 in Business & Finance ➔ Renting & Real Estate
Your loan balance will drop faster on a 15 year mortgage. The majority of your payment goes to interest on both loans esp in the first few years.
You have paid in alot more principal than you would have on a 30 yr. Your payments were higher.
FYI:
Paying a mortgage in 15 years is not always the smartest thing to do. You are losing the use of the extra money that you are paying. There is nothing wrong with manageable, tax deductible debt. Your home will go up or down regardless of what you owe on it.
Without knowing the rest of your financial situation, it's impossible to know what is better for you.
Do you have ANY other consumer debt at a higher interest rate ? Car payments, credit card debt ?
4 years ago with a 15 yr mortgage, you should have a rate around 4.75%... You could earn over 5.25% on money today.
I'd like to borrow as much as possible at 4.75% today, but it isn't possible. Need to grasp the value of time and money.
2007-07-08 10:21:22 · answer #1 · answered by CommonCents 4 · 0⤊ 0⤋
The answer is no!
Since 30 year mortgages take twice as long to pay down, a 15 year mortgage will give you more equity at the end of your 4th year.
Terry S.
http://www.Welcome2Arizona.com
2007-07-08 22:02:43 · answer #2 · answered by Terry S 5 · 0⤊ 0⤋
No.
If the mortgage has a term of only 15 years, the principal has to get paid off twice as fast. That's why payments on 15 year mortgages are higher, assuming equal interest rates.
As long as your mortgage is fully amortizing, and you're comparing to a fully amortizing 30 year mortgage, you have more equity with your 15 year mortgage than you would have had with a 30 year mortgage.
2007-07-11 19:16:06 · answer #3 · answered by yeagerre 2 · 0⤊ 0⤋
You accrue equity faster with a shorter term mortgage. So you did the right thing by going with a 15 year mortgage. If you want to know how much equity you have accrued, contact your mortgage company.
2007-07-08 17:10:49 · answer #4 · answered by jamie5987 4 · 2⤊ 0⤋
The answer to that is no! You accrue equity faster with a fifteen year mortgage because more of each payment goes to paying the balance owed not the interest.
2007-07-08 17:12:35 · answer #5 · answered by JUAN FRAN$$$ 7 · 1⤊ 0⤋
No, you get the most of equity with 15 years mortgage. So you did a good job! Good Luck!
2007-07-08 17:15:37 · answer #6 · answered by reality 6 · 0⤊ 0⤋
you will always accumulate more equity by paying your principle down at a faster rate.
2007-07-08 17:16:38 · answer #7 · answered by david b 1 · 0⤊ 0⤋
Yes in effect you do, because you are paying off more principle each month.
2007-07-08 17:10:48 · answer #8 · answered by Alterfemego 7 · 2⤊ 1⤋