The 5 Banks with the Best 15 Year Mortgage Rates
If you do not relish the thought of owning money on your home for the next 30 years, a 15-year mortgage might be a better option for you. There are some great rates to be had on such loan packages at the moment, so you will want to do your homework to get the best deal. That is why you will want to know which banks offer the best 15-year mortgage rates.
Every bank out there offers slightly different rates on their 15-year mortgages. This is why it is essential to do your homework and look for the banks that offer the best rates, given your current credit rating. There are other factors to consider as well, each one impacting the rate you will be offered.
Buying a home is one of the most important financial decisions that you will make in your life. You want to make sure you are getting the best deal possible, so you will want to continue reading to learn about the benefits associated with a 15-year mortgage. You will also discover some banks that tend to offer the lowest rates for you to take advantage of.
What is a 15 Year Mortgage?
When you take out a 15-year mortgage, the loan typically comes with a fixed interest rate and monthly payment that will remain the same for the duration. Since the entire amount of the loan will be paid off at the end of the 15 years, the total amount paid will be lower than if a 30-year mortgage was entered into. This can save quite a bit of money in the long term.
In practical terms, the 15-year mortgage is similar to a 30 year because the borrower’s credit score determines the prevailing interest rate. The monthly payment will also be higher because the borrower agrees to pay back the loan in half the time. Because of this, some borrowers opt for a 30-year mortgage and will then try to pay it off sooner.
What Are 3 Advantages of Using a 15 Year Mortgage?
Depending on a borrower’s personal situation, there are quite a few advantages associated with agreeing to a 15-year mortgage instead of one that stretches out for the traditional 30 years. It is up to the individual or couple to determine if these advantages warrant seeking out options from banks that offer a 15-year mortgage.
Pay Significantly Less in Total Interest
It is no secret that interest charges add up quite quickly when looking at a mortgage. In many cases, you will pay more in interest over the life of your loan than the home’s original price. The only way to avoid interest charges is to pay for the home in cash, but most people are unable to do that. This is particularly true for first-time homebuyers who have no equity built up.
When you enter into a traditional 30-year mortgage, it can seem like the amount owed on the loan never seems to get much lower. This is because of how much you will be paying in interest each month. One of the advantages of a 15-year mortgage is that the interest payments do not account for so much of the monthly payment.
You will notice that the principal amount still owed on your mortgage begins to go down much more quickly with a 15-year mortgage. This means that you will pay quite a bit less in interest charges over the life of the mortgage as a result. This is real money that you can put right back in your pocket. It also builds equity in your home much more quickly.
Enjoy a Lower Interest Rate
Another major advantage of a 15-year mortgage is that they tend to come with a lower interest rate. This will also effectively decrease the amount of interest that you pay over the life of the loan. Banks can offer this lower interest rate because of the lower risk associated with a 15-year mortgage.
Banks view 15-year mortgages as less risky because the principal amount of the loan begins to be paid back much more quickly than it would with a 30-year mortgage. This means that equity builds up more quickly in the home as a result. If you were to default on the mortgage, the bank would likely more than recoup its money.
When you are considering a 15-year mortgage, you will want to shop around for the best interest rates. You will find that the rate offered can be anywhere from a quarter-point to more than pointless than you would be offered with a 30-year mortgage. This is significant savings and points to a major advantage of this length of the loan.
Invest Your Monthly Savings in Your House
You are probably well aware of the fact that your house will form the single biggest investment that you have in your portfolio. Equity in your home can grow much more quickly than any other type of stock or money market account. This reflects yet another advantage of a 15-year mortgage.
Because a 30-year mortgage comes with lower payments, many homeowners will take the savings and invest them in other vehicles. Instead of doing that, a 15-year mortgage takes that extra money and works to pay off your home that much more quickly. Once it is paid off, the entire home is an asset that typically appreciates over time.
The 5 Banks with the Best 15 Year Mortgage Rates
With literally thousands of banks in operation across the country today, it can seem like a monumental task to find the one with the best rate in your region. That is why it is helpful to know which banks offer the best 15-year mortgage rates ahead of time. The following list should get you headed in the right direction.
1. Rocket Mortgage
Rocket Mortgage is a lending institution that makes it easy for individuals and couples to apply for a 15-year mortgage. You can use your smartphone to check rates and get your application submitted. It is great for individuals who already know what they want and who do not really need personal guidance every step of the way.
This bank will estimate the loan amount and rate that you qualify for in just a few minutes after submitting the application. You can submit all necessary documents entirely online, saving a lot of time and hassle. Because of their low overhead, Rocket Mortgage claims that they are able to offer lower rates than other institutions.
2. New American Funding
New American Funding offers a range of products, many of them appealing to nontraditional borrowers. You will find great rates on 15-year mortgage products along with many down payment assistance programs that are not typically available with other banks. In addition, it is able to offer loans to individuals and couples who have continually been turned away by others.
What makes New American Funding unique is that they use manual underwriting. This puts a human at the center of applications in order to determine a borrower’s creditworthiness. This allows those with better credit ratings to take advantage of lower rates on a 15-year mortgage, while others can still secure such a loan as well.
3. Guaranteed Rate
With Guaranteed Rate, borrowers will be able to take advantage of an entirely online application. It is a bank that is open to applicants from across the country. This will make it appealing to many because they are able to offer some appealing rates on 15-year mortgages. They are great for individuals and couples looking for a conventional or government-backed loan.
When you apply at this bank, all of your documents can be uploaded via their secure server. When it comes time to sign loan documents, you can do that electronically as well. This means that you will not have to make personal visits to a bank in order to get the best interest rates. Many people have found that this really works out well for them.
The guaranteed rate also openly displays the current rates for the products that it offers. When it comes to 15-year mortgage rates, these tend to perform quite favorably in comparison to other banks operating in any given region. One thing to keep in mind is that they do not offer home equity loans if that is something that you decide to look for after a few years.
4. Reali Loans
Reali Loans is a regional lending institution offering some great 15-year mortgage rates if you qualify. As most of the banks on this list, it offers a completely online experience. This makes it is easy to look up the current rates that they offer and then submit an application right from the comfort of your own home.
Since there are many documents that need to be submitted during the mortgage application process, it is comforting to know that Reali Loans makes this easy. Everything can be uploaded right to their site for review. There is very little human interaction, so that is something that you will keep in mind as you begin.
This bank also posts all of its current interest rates in a transparent place on its website. This allows you to know exactly what you are applying for because you spend any time doing so. You will also get a quote that is customized for your particular situation when you apply for a 15-year mortgage at Reali Loans.
5. Chase
Chase Bank is perhaps the best-known mortgage lending institution in the country. It is available to borrowers throughout the country, while it has physical offers in roughly half of the states in America. Because of its lending power, it has long been able to offer some of the best 15-year mortgage rates to qualified borrowers.
The key to getting the best rates from Chase is to have a high credit score and be desirable in other areas. They offer a number of refinance options as well that are quite appealing. People with 30-year mortgages that they want to convert to a 15-year mortgage will find Chase a good choice in many situations.
Wrap-Up
Now that you are aware of the banks currently offering the best rates on 15-year mortgages, it is time to consider which one is the best for you. If you thought before that your dream home was out of your reach, you might just be pleasantly surprised at how affordable it has become.
