The Real Estate Nerve

What are the advantages of a 15-year mortgage vs. a 30-year? — Possible Buyer

Dear Possible Buyer:

Great question! In my last column we discussed some estimated numbers to consider:
If you purchase a home for $80,000 with $1,500 set aside each year for insurance and
$2,500 for taxes at 7 percent APR (by the way we are seeing much better interest
rates: 5 and 6 percent) over 30 years, your payment will be approximately $820 a
month.

If you take that same loan package and change it over to 15 years your monthly
payment could fall somewhere in the ballpark of $1,050. Just $230 more a month
saves you approximately $114,000 in interest payments...