15-Year Fixed-Rate Mortgage

A 15-year fixed-rate mortgage locks in your interest rate for the entire 15 years, ensuring your monthly payments stay the same, making budgeting easier. This type of loan is popular for buying or refinancing homes because it provides payment stability, unaffected by market fluctuations.

Remember, the fixed monthly payment doesn't cover property taxes, homeowners insurance, or homeowner association fees. For an estimate of your monthly mortgage payment with a fixed-rate loan, try using our mortgage calculator.

A 15-year fixed-rate mortgage offers a straightforward way to finance your home with stable monthly payments. First, assess your financial situation and homeownership goals. Consider your credit score, debt-to-income ratio (DTI), monthly income, and the current housing market. These factors will influence the terms of your loan, including the interest rate and monthly payment amount.

Your DTI is calculated by dividing your total monthly debt payments by your monthly income. This includes debts like credit card payments, student loans, and car loans. A lower DTI and a higher credit score can help you secure a lower interest rate, making your loan more affordable.

Once you choose a 15-year mortgage, the payment amount is locked in for the duration of the loan, providing predictable expenses and simpler budgeting, regardless of market fluctuations.

15-year fixed-rate mortgages offer several advantages:

Lower Interest Rates: Since these loans are shorter, lenders take on less risk and typically offer lower rates. This means you'll pay less interest overall compared to a 30-year mortgage. Check out the mortgage calculator on the New American Funding website to see what you might pay for a 15-year loan.

Save Money: With a 15-year mortgage, you'll pay less interest over the life of the loan, saving you money in the long run.

Own Your Home Sooner: Pay off your mortgage in half the time it takes with a traditional 30-year mortgage, allowing you to own your home faster.

Build Equity Quickly: Accelerate your home equity with a 15-year mortgage as you pay down the principal faster.

Retirement Ready: Have your mortgage fully paid off by the time you retire, easing financial worries in your golden years.

Start your homebuying journey with a pre-approval for a 15-year or 30-year mortgage. Pre-approval helps you:

• Focus your search on homes within your budget.
• Show sellers you're serious and ready to buy.
• Speed up the loan process and close faster.
• Enjoy a smoother homebuying experience.

Requirements for a 15-year mortgage after pre-approval:

• Credit Score: Typically, you need a score between 580 and 620, but some lenders may accept as low as 500 for certain loans. A score of 620 is usually needed for a standard Conventional loan.
• Debt-to-Income Ratio (DTI): Aim for a DTI below 50%. This includes debts like credit cards and personal loans. A DTI over 43% might make it tough to qualify.
• Down Payment: Be prepared to pay at least 3%, depending on your loan type and terms.

Each lender has unique standards, so check with yours for specific requirements.

Looking to refinance? You'll need:

• Proof of Income: Documents like W2s, tax statements, or pay stubs.
• Asset Information: Statements from banks, 401(k), and other investments.
• Homeowners Insurance: Ensure you have adequate coverage.

Lenders have additional specific qualifications for refinancing, so consult your loan officer for details.

Check out today’s mortgage rates and get started!

Conventional 15-Year Fixed-Rate Mortgage: This type of loan isn't backed by the government, offering more flexibility in terms and conditions. You might only need a 3% down payment. However, if your down payment is less than 20%, you'll need private mortgage insurance (PMI), which can be dropped once you've built 20% equity in your home.

FHA 15-Year Fixed-Rate Mortgage: Backed by the Federal Housing Administration, this loan is ideal if you're a first-time buyer or have a lower credit score. You can start with as little as a 3.5% down payment. Remember, FHA loans require both an upfront and ongoing monthly mortgage insurance payment, and loan limits vary by location.

VA 15-Year Fixed-Rate Mortgage: Exclusively for active-duty military, Veterans, and certain military spouses, VA loans offer great benefits like no down payment and no monthly mortgage insurance premiums.

15-Year Fixed-Rate Refinance: If you're looking to replace your existing mortgage, refinancing to a 15-year fixed-rate mortgage could lower your monthly payments or shorten your loan term, especially if interest rates have dropped since you first borrowed.

For personalized advice and to explore which loan might be best for you, reach out to a licensed loan officer at New American Funding. They're ready to assist with all your questions.

Many homeowners consider refinancing their mortgage to reduce monthly payments or shorten their repayment term. Refinancing replaces your existing mortgage with a new one, often with different terms. For example, switching from a 30-year to a 15-year mortgage can help you pay off your home quicker and save on interest. This could mean higher monthly payments due to the shorter loan period.

To refinance, you'll need to undergo a process similar to your initial loan application, which includes evaluating your financial situation and meeting lender requirements like a good credit score, low debt-to-income ratio, and stable income.

Who Should Choose a 15-Year Mortgage?

A 15-year mortgage is ideal for those who can handle higher monthly payments and wish to own their home faster.

Is It Smarter to Pay Off a 30-Year Loan in 15 Years?

Deciding to pay off a 30-year loan in 15 years depends on your financial situation and loan terms, such as your income, budget, and any prepayment penalties. Consult with your lender to explore the best options for you.

What Are the Drawbacks of a 15-Year Mortgage?

While 15-year mortgages often feature lower interest rates, they also require higher monthly payments. This can limit your ability to allocate money towards other investments.