Should you switch to a 15-year mortgage?

If paying off your house is a priority, you’ve obviously considered it. “One of the biggest benefits of a 15-year mortgage term is the ability to quickly pay off your home loan,” said Money Crashers. “This option is perfect if you plan to stay put and don’t want to pay your mortgage for a lengthy period of time.” 

But even if you’re not planning to live in your home forever, a 15-year mortgage can be a great way to go because of the money saved. And we’re not talking about pennies. We’re talking hundreds of thousands of dollars.

“The 30-year fixed mortgage is practically an American archetype, the apple pie of financial instruments. It is the path that generations of Americans have taken to first-time home ownership. According to the Mortgage Bankers Association, 86% of people applying for purchase mortgages in February 2015 opted for 30-year loans,” said Investopedia.

“But many of those buyers might have been better served if they had opted instead for a 15-year fixed-rate mortgage, the 30-year’s younger, and less popular, sibling. A shorter-term loan means a higher monthly payment, which makes the 15-year mortgage seem less affordable. But, in fact, the shorter term actually makes the loan cheaper on several fronts.”

The savings is substantial

“Imagine a $300,000 loan, available at 4% for 30 years or at 3.25% for 15 years,” they said. “The combined effect of the faster amortization and the lower interest rate means that borrowing the money for just 15 years would cost $79,441, compared to $215,609 over 30 years, or nearly two-thirds less.”

According to The Mortgage Reports, going with a 15-year mortgage translates to a reduction in “the amount of mortgage interest paid over the loan’s life by $44,000 per $100,000 borrowed as compared to a 30-year loan.

For loans at the conforming loan limit of $417,000, then, a homeowner would save $183,000 by using a 15-year mortgage to finance the home instead of using a 30-year one.”

That’s a lot of money. But it’s that higher monthly payment that is often the sticking point for many borrowers. The monthly payment on a 15-year loan will cost more than one that’s double in length for obvious reasons, you’re paying off more money in less time. But the two loan terms do not offer an apples-to-apples comparison because the interest rates for 15-year mortgages tend to be lower.

“15-year-loans are less risky for banks than 30-year loans, and because the money banks use to make shorter-term loans costs them less than the money they use to make longer-term loans, consumers pay a lower interest rate on a 15-year-mortgage, anywhere from a quarter of a percent to a full percent (or point) less,” said Investopedia. “And the government-supported agencies that finance most mortgages impose additional fees, called loan level price adjustments, which make 30-year mortgages more expensive.”

The monthly payment on the 30-yer mortgage referenced above is $1,432. On the 15-year loan, it comes out to $2,108. That steep increase is often a deterrent for borrowers – especially those who are more concerned with their current monthly input and output than potential long-term savings.

Doing it on your own

Of course, a 15-year mortgage isn’t the only way to pay your house off sooner. Making additional principal payments can eat away at your balance without tying you to a higher monthly payment. Even one extra payment per year can make a big difference.

“Making an extra mortgage payment each year (totaling 13 payments in a 12-month period) could reduce a 30-year mortgage loan to approximately 22 years,” said Nationwide.

“The most budget-friendly way to do this is to pay 1/12 extra each month. For example, by paying $975 each month on a $900 mortgage payment, you’ll have paid the equivalent of an extra payment by the end of the year.”

Overpaying also offers a shorter path to an equity position, so when you are ready to sell, you have more equity in your home and are in a greater buying position. And if you do get into a situation where you need cash you can always pull the equity out of your home.

If you’re on the fence and are thinking about buying a historic home in Phoenix, please call Laura B. Browse all historic Phoenix Districts and their homes for sale.

The Arcadia neighborhood is one of the most desirable addresses in Phoenix.

Camelback Mountain is prominently seen from many homes in the Historic Arcadia Neighborhoods

I personally lived in Arcadia starting in 1989 as the first house I purchased was in this eclectic neighborhood. I had a stunning view of Camelback Mountain in my back yard like so many homes in Arcadia do. In fact, you’d be hard pressed to find a home that doesn’t have a view of Camelback Mountain, at least to some degree. I can attest to all the wonderful attributes Arcadia has to offer but don’t take my word for it; get in your car and go cruise the area. You’ll fall in love with it.

Arcadia is bounded by 44th Street to 68th Streets and from Indian School Road to Camelback Mountain. Immediate surrounding areas have more recently been referenced as Lower Arcadia or the Arcadia area but the true Arcadia corridor begins at the corner of 44th Street and Indian School Road going north and east from there. Contrary to many people trying to ride on the “Arcadia” name, there is indeed a true, defined Arcadia Corridor.

Arcadia neighborhood is not officially a historic district and its eastern edge is in the City of Scottsdale but Arcadia has more than earned its huge place in Phoenix history.

Arcadia Homes For Sale

Arcadia is one of the most desirable and priciest addresses in Phoenix. The homes range from small ranch houses under 1,000 Square feet to stunning luxury estates that sit on five acres with a lot of in-between. You’ll find a wide variety of architectural styles from sprawling 4 to 5-bedroom ranches built in the postwar era to Revivals and Pueblo-style homes dating to the late 1920’s and early 1930’s

The neighborhood is surrounded by original luxury guest resorts along Camelback Road like the Royal Palms and is walking distance to many trending restaurants are bars such as The Vig, LaGrande Orange Grocery and Pizzeria, Postino’s Wine Cafe, Zipps, The Arcadia Tavern, the famous Pete’s Fish and Chips and so much more! Eating and drinking your way around Arcadia is fun and can take some time.

Many people now refer to Arcadia as Midtown as it’s in the middle of everything superb and its overall location is in the center of it all. Sky Harbor Airport is just a hop and a skip away as is Biltmore Fashion Park, Fashion Square in Scottsdale and Paradise Valley along with a plethora of fantastic golf courses! Downtown and Central Phoenix is just a very short jaunt as is I-10, the Loop 202, the 51 and the 143.

Arcadia Park, G.R. Herberger Park, Camelback Mountain (and its hiking trails) along with easy access to the canal gives many options for hiking, jogging, biking and walking.

Arcadia is also known for its top tier public schools (some of the best in the state) such as Hopi Elementary School, Ingleside Middle School and Arcadia High School in the Scottsdale Unified School District making it an extremely family friendly community. There are also private schools in the area.

This is the type of neighborhood where the neighbors know each other, walk their dogs and are out with their children enjoying the tranquility this wonderful neighbor offers!

Arcadia homes have character, are well-kept and have high property values as the neighborhood is adjacent to the upscale suburbs of Paradise Valley, the Biltmore area, Scottsdale and North Central Phoenix. Most lawn have lush, green lawns, custom landscaping, palm trees and citrus trees galore!

Built on former citrus groves, Arcadia is known for well-irrigated, mature landscaping. Several yards prominently feature orange, lemon and grapefruit trees as reminders of the area’s past. The area used to be occupied by citrus farmers from 1919 to the mid-1950’s. In the mid-1950’s, the rest of Phoenix caught up with the farms and the area suburbanized with characteristic ranch homes on large lots. Arcadia High School serves and derives its name from the neighborhood.

The film, Everything Must Go, takes place in Arcadia.

In 2002, CNNMoney voted Arcadia as one of the “Best Places To Live” stating:

In stark contrast to Ahwatukee’s desert foliage are the lush green lawns of Arcadia, a neighborhood that sits on the Phoenix and Scottsdale city line. Arcadia is a former orange grove with its own irrigation system, and rows of citrus trees line its blocks of quaint homes built in the 1950’s and 1960’s on large lots.

Because Arcadia is so highly regarded for its greenery and high-performance schools, which are in the Scottsdale system, prices are on the high end: Starter homes begin at $300,000. Homeowners tend to do a lot of remodeling, adding much diversity to the once similar-looking homes; it’s not uncommon to see a country cottage adjacent to a Spanish hacienda. Residents brag about being close to Scottsdale’s high-end shopping, a world-class resort, arts centers and good restaurants, as well as downtown Phoenix.

I couldn’t agree more. After all, living in Arcadia for so many years, I’m hooked.

Sunday, February 28, 2016 is the 29th Annual Coronado Historic Neighborhood Home Tour from 11 am–4 pm. Start at Circle Park, 10th Street & Windsor, Phoenix 85006. This year, Country Club Park Historic District will be featured.

Coronado Historic District’s Annual Home Tour

From the Coronado Neighborhood Association Website

The Coronado Neighborhood Association welcomes you to a Picnic in the Park, the 29th Annual Coronado Home Tour.

This year we will gather at Circle Park and enjoy food and picnic games surrounded by music, arts and crafts for the kids, a lively street fair, homes open for tour and the Coronado Classic car and bicycle show.

This year’s tour will highlight the Country Club Historic District, one of three historic districts in the Greater Coronado neighborhood. Country Club Park earned historic designation in 1993 and has a history dating to 1888 when Charles Orme filed a homestead patent for the area. Read the full history of County Club Park Historic District here.

Home Tour tickets can be purchased in advance online for $13 (including fees) or on Tour Day for $15 cash or credit. Pick up your wrist band (your pass to the homes on tour) and Home Tour Guide at the ticket booths on each end of Circle Park.

VEHICLE PARKING: Coronado is a residential neighborhood, so you may park in front of any home throughout the area and walk to Circle Park on Windsor Ave. (two blocks south of Thomas Rd.) between 8th and 10th St. Please be courteous of residents and do not block driveways.

BIKE PARKING: We encourage you to ride your bike to the event. There will be over a dozen bike racks available around Circle Park and in front of homes on the tour you can lock your bike up to. Just make sure to pick up your bike by 4pm if in front of a home or 5pm if locked up at Circle Park.

For tickets and more information, click here. Check out other historic districts in Phoenix, AZ.

9 am Kids Parade around Circle Park

9 am – 4 pm Fair, Family Festival and Picnic Games in the Park

80+ vendors, 10+ food trucks & treat booths

live music entertainment

11 am – 4 pm Coronado Classic car and bicycle show

Downtown Phoenix Events

Arizona Beer Week 2016

Arizona Beer Week festivities begin this Thursday and whether you’re a craft brew connoisseur or just a beginner, you’re sure to find something to please your beer-drinking palate.

Events are scheduled across the state from February 11 through February 21, but here is a list of events you’ll find in the greater downtown Phoenix area.

Thursday, February 11

Clever Koi – THAT Brewery Beer Dinner

Friday, February 12

Oven & Vine – Two Brothers Beer & Food Tasting

Angels Trumpet Ale House – Stone/Sierra Nevada Tap Takeover

The Coronado – San Tan Brewing Craft and Charity Night

Saturday, February 13

Angels Trumpet Ale House – Brunch Before the Storm

Steele Indian School Park – Strong Beer Festival

Sunday, February 14

Phoenix Ale Brewery, The Velo Bike Shop/Bicycle Nomad Cafe, ThirdSpace, The Rose & Crown Pub – Phoenix Ale Beer & Bike Social Ride

Flowers Beer and Wine – VIP Wristband

Rose & Crown Pub – VIP Wristband

Sun Up Brewing Co. – Central Phoenix Brewery Tour

Pizzeria Bianco – Historic Brew Co. “Beer is for Lovers” Dinner

Monday, February 15

Sun Up Brewing Co. – Food Pairing with Copper Dome Pilsner

Tuesday, February 16

Sun Up Brewing Co. – Cupcake and Beer Pairing

Stand Up Live – Strong Beer Night

Wednesday, February 17

DeSoto Central Market – Sonoran and Phoenix Ale Tap Assault and Burger Night

Circle 6 Studios Gallery – Hot Glass Cold Beer with THAT Brewery

Thursday, February 18

Angels Trumpet Ale House – Arizona Firkin Day

Friday, February 19

Sun Up Brewing Co. – Cigars with Uwe

Rose & Crown Pub – Left Hand Keep the Pint Night

Sunday, February 21

ThirdSpace – Ice Cream Beer Brunch with SanTan Brewing

Since April 2014, Downtown Phoenix Journal has been sharing the story of the developing proposal for a Roosevelt area Enhanced Municipal Services District, more commonly known as a Business Improvement District or BID. 

Roosevelt Row, Phoenix, AZ

Roosevelt Row BID Proposal Faces New Challenges.

Over the past 18 months, the Roosevelt Row community has been engaged in the process of forming a business improvement district (BID), which would provide enhanced municipal services for the area. Though the proposal for the BID passed the Phoenix City Council in January, it is now in danger of being invalidated due to a bill that is advancing in the state legislature.

HB 2440 would essentially change the process for the formation of BIDs – not just in downtown Phoenix, but across the state. If passed, it would incorporate more government oversight into the process and would be retroactive to January 1, 2016.

The bill is sponsored by Representative Warren Petersen of Gilbert and is supported by a group of Roosevelt Row land owners who oppose the formation of the BID. The bill passed the House this week and is now on its way to the Senate.

Earlier in the week, Roosevelt Row CDC sent a letter to Roosevelt business owners informing them about the bill. The letter is excerpted here:

Dear Roosevelt Row Business Owner,

As many of you are aware, the Phoenix City Council recently approved the formation of a business improvement district for our Roosevelt Row area. That vote gives us the opportunity to create an organization that represents us, the small business owners of Roosevelt Row, to collectively market our area as an evolving canvas of creativity.

By forming this district we will be able to promote arts, music, dining and shopping opportunities which will increase business and community awareness of Roosevelt Row as a culturally diverse destination welcoming to everyone.

To be clear, the Council’s vote to approve the District is contingent upon us working together to develop by-laws and a budget which reflects our priorities in a fiscally responsible manner. Once those documents are completed the City Council will then review, modify, and/or approve what we submit.

While we are currently in the process of developing those items (budget and by-laws), a lobbying firm, which recently purchased a building on Roosevelt Row, is using its influence to retroactively stop our district from being formed and essentially prohibiting any future Business Improvement Districts from ever being organized again.

Public Policy Partners, a lobbying firm owned and operated in part by lobbyist Marcus Dell’Artino, has successfully gotten a Gilbert lawmaker to introduce House Bill 2440, which would essentially prohibit any types of these organizations from ever being organized again anywhere in Arizona! And the bill is retroactively dated to the date our district was approved by Phoenix City Council.

Currently business improvement districts are successfully operating in Downtown Phoenix, Tempe, Mesa, Chandler, Tucson and Flagstaff – they have been highly effective in revitalizing these urban core areas by recruiting, retaining and expanding locally-owned and independently operated small businesses and promoting these areas as unique cultural, artistic and commercial destinations. They have proven to be powerful economic engines to spur business and job growth.

If you agree with the Roosevelt Row CDC and would like to voice your support for the BID, follow this link to contact members of the Arizona Legislature: http://www.rooseveltrow.org/save-roosevelt-row/

DAILY REAL ESTATE NEWS | FRIDAY, FEBRUARY 05, 2016

For the fifth consecutive week, mortgage rates trended down, surprising even forecasters. The 30-year fixed-rate mortgage is now at its lowest average since April 30, 2015.

“Market volatility — and the associated flight to quality — continued unabated this week,” says Sean Becketti, Freddie Mac’s chief economist. “The yield on the 10-year Treasury dropped another 15 basis points, and the 30-year mortgage rate fell 7 basis points as well, to 3.72 percent.

Both the Treasury yield and the mortgage rate now are in the neighborhood of early-2015 lows. These declines are not what the market anticipated when the Fed raised the Federal funds rate in December. For now, though, sub-4-percent mortgage rates are providing a longer-than-expected opportunity for mortgage borrowers to refinance.”

This week the market forecasted zero hikes in 2016 for the Fed’s short-term rates, which could keep mortgage rates low.

Analysts are now predicting that the closely monitored Fed Futures market has nearly a 60 percent chance of no rate hikes at all this year, marking a “dramatic U-Turn from only a month ago when the market was pricing in a 75 percent probability the Fed would increase rates at least once in 2016,” CNNMoney reports.

The Fed had risen rates 0.25 in December, its first increase in nearly 10 years. But with stock markets spiraling downward and the fragile global economy, analysts believe this will likely prompt the Fed to pause in raising rates.

“Things have happened in financial markets and in the flow of economic data that may be in the process of altering the outlook for growth,” Fed vice chairman Bill Dudley told MarketWatch this week.

Freddie Mac reports the following national averages with mortgage rates for the week ending Feb. 4:

• 30-year fixed-rate mortgages: averaged 3.72 percent, with an average 0.6 point, dropping from last week’s 3.79 percent average. A year ago, 30-year rates averaged 3.59 percent.
• 15-year fixed-rate mortgages: averaged 3.01 percent, with an average 0.5 point, falling from last week’s 3.07 percent average. Last year at this time, 15-year rates averaged 2.92 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 2.85 percent, with an average 0.4 point, falling from last week’s 2.90 percent average. A year ago, 5-year ARMs averaged 2.82 percent.

The opportunity to buy a home at low interest rates is still here. For how long, who knows?