Comments on: 15 vs 30 Year Mortgage: A Risky Dilemma http://www.youneedabudget.com/blog/2005/15-vs-30-year-mortgage-a-risky-dilemma/ You haven't budgeted like this. Sat, 12 May 2012 14:35:16 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Mike http://www.youneedabudget.com/blog/2005/15-vs-30-year-mortgage-a-risky-dilemma/#comment-295 Mike Tue, 12 Jul 2011 19:38:38 +0000 http://www.youneedabudget.com/blog/?p=92#comment-295 What so many fail to see with their comments is the problem with selling a home before the loan is satisfied. See how much better off you are if you had a 15 year loan vs. a 30 year loan. If you live in a house for 10 years and then sell it you have hardly any equity with a 30 year loan after 10 years. You almost have the house paid off after 10 years with a 15 year loan. If you had a 15 year loan you would take your equity and buy a new house and get a 10 year loan or another 15 year loan the next time. People who use 30 year loans (using your $175K scenario) have $31,000 in equity after ten years. That does not even cover the 20% down payment. You did not even consider MIP or PMI in the equation either. What so many fail to see with their comments is the problem with selling a home before the loan is satisfied. See how much better off you are if you had a 15 year loan vs. a 30 year loan. If you live in a house for 10 years and then sell it you have hardly any equity with a 30 year loan after 10 years. You almost have the house paid off after 10 years with a 15 year loan. If you had a 15 year loan you would take your equity and buy a new house and get a 10 year loan or another 15 year loan the next time. People who use 30 year loans (using your $175K scenario) have $31,000 in equity after ten years. That does not even cover the 20% down payment. You did not even consider MIP or PMI in the equation either.

]]> By: Jesse http://www.youneedabudget.com/blog/2005/15-vs-30-year-mortgage-a-risky-dilemma/#comment-294 Jesse Fri, 29 Apr 2011 15:03:05 +0000 http://www.youneedabudget.com/blog/?p=92#comment-294 The rate difference can be (and almost always is) a significant savings. When we purchased our home (years after writing this article), I went with a 30-year for the flexibility and we just used some discipline and paid it down faster. The interest savings wasn't worth the flexibility to me. The rate difference can be (and almost always is) a significant savings. When we purchased our home (years after writing this article), I went with a 30-year for the flexibility and we just used some discipline and paid it down faster. The interest savings wasn’t worth the flexibility to me.

]]> By: Dannyboy http://www.youneedabudget.com/blog/2005/15-vs-30-year-mortgage-a-risky-dilemma/#comment-293 Dannyboy Fri, 29 Apr 2011 14:39:18 +0000 http://www.youneedabudget.com/blog/?p=92#comment-293 Everybody here is wrong. Do the 30 year and simply send an additional $401/month that will be applied directly to principal. The loan will still be paid off in 15 years and you will have saved thousands in interest over the 15 year loan (assuming the difference in rates isn't significant). End of story. Everybody here is wrong. Do the 30 year and simply send an additional $401/month that will be applied directly to principal. The loan will still be paid off in 15 years and you will have saved thousands in interest over the 15 year loan (assuming the difference in rates isn’t significant). End of story.

]]> By: Laura http://www.youneedabudget.com/blog/2005/15-vs-30-year-mortgage-a-risky-dilemma/#comment-292 Laura Thu, 10 Mar 2011 17:56:56 +0000 http://www.youneedabudget.com/blog/?p=92#comment-292 Jesse, Reading your article gave me a peace of mind! Thank you for your detailed and thorough analysis! Laura Jesse,

Reading your article gave me a peace of mind! Thank you for your detailed and thorough analysis!

Laura

]]> By: Mark Peoples http://www.youneedabudget.com/blog/2005/15-vs-30-year-mortgage-a-risky-dilemma/#comment-291 Mark Peoples Thu, 03 Feb 2011 11:20:59 +0000 http://www.youneedabudget.com/blog/?p=92#comment-291 I was searching the internet for an answer to the 15 vs 30 year mortgage. We are now faced with the decision whether or not to pay an extra $500 a month on a $350,000 mortgage to be debt-free in 15 years. If we went with the 30 year we are definitely the type of couple to invest the $500 but the last question solidified it for us. How would it feel to own our home in 15 years. It would feel GREAT. After reading your post we made our decision. We will choose the 15 year option for many reasons, the most being the debt-free peace of mind. Thanks for the insightful article! Mark I was searching the internet for an answer to the 15 vs 30 year mortgage. We are now faced with the decision whether or not to pay an extra $500 a month on a $350,000 mortgage to be debt-free in 15 years. If we went with the 30 year we are definitely the type of couple to invest the $500 but the last question solidified it for us. How would it feel to own our home in 15 years. It would feel GREAT. After reading your post we made our decision. We will choose the 15 year option for many reasons, the most being the debt-free peace of mind.

Thanks for the insightful article!

Mark

]]> By: Matt http://www.youneedabudget.com/blog/2005/15-vs-30-year-mortgage-a-risky-dilemma/#comment-290 Matt Thu, 16 Dec 2010 16:47:46 +0000 http://www.youneedabudget.com/blog/?p=92#comment-290 In my situation I would go with the 30 year mortgage. Let me explain my reasoning. 1. I believe that the dollar will continue to degrage more and more rapidly in response to the current circumstances we have in the usa (Ben Bernanke believes in very loose monetary policy and will continue to devalue the dollar by printing money thereby decreasing our debt load) 2. If rapid inflation does occur then today's dollars will be much more valuable than future dollars. This type of environment is good for debtors and bad for creditors. 3. With the extra money I will be receiving per month this will help me qualify to buy other investment properties. Also the extra cash flow will allow me to save faster for a downpayment on a new investment property. In short, as long as I can buy properties that can easily be rented out for more than their monthly costs I believe it is advisable to buy as many properties as possible in the current conditions with low interest rates and low prices. This guards against inflation because the value of the house will increase with inflation and you can increase rent to follow the path of inflation. I would be interested in hearing other people's opinions on this idea. Thanks, Matt In my situation I would go with the 30 year mortgage. Let me explain my reasoning.

1. I believe that the dollar will continue to degrage more and more rapidly in response to the current circumstances we have in the usa (Ben Bernanke believes in very loose monetary policy and will continue to devalue the dollar by printing money thereby decreasing our debt load)

2. If rapid inflation does occur then today’s dollars will be much more valuable than future dollars. This type of environment is good for debtors and bad for creditors.

3. With the extra money I will be receiving per month this will help me qualify to buy other investment properties. Also the extra cash flow will allow me to save faster for a downpayment on a new investment property.

In short, as long as I can buy properties that can easily be rented out for more than their monthly costs I believe it is advisable to buy as many properties as possible in the current conditions with low interest rates and low prices. This guards against inflation because the value of the house will increase with inflation and you can increase rent to follow the path of inflation.

I would be interested in hearing other people’s opinions on this idea.

Thanks,

Matt

]]> By: Joe http://www.youneedabudget.com/blog/2005/15-vs-30-year-mortgage-a-risky-dilemma/#comment-289 Joe Sun, 14 Nov 2010 13:35:10 +0000 http://www.youneedabudget.com/blog/?p=92#comment-289 Thanks for an interesting and detailed analysis. Gave me much to think about. One intangible that I think could be added here is the intention to live in the house for the length of the loan. I'm currently weighing these options for a house that i'm likely to live in for 10 to 12 years before retiring to my villa on the beach (or my row home in detroit, depending on those assumptions) For me, peace of mind is a mortgage payment that i'll be able to make every month and have money left for fun and investment. Again, thanks for the brain food! Thanks for an interesting and detailed analysis. Gave me much to think about. One intangible that I think could be added here is the intention to live in the house for the length of the loan. I’m currently weighing these options for a house that i’m likely to live in for 10 to 12 years before retiring to my villa on the beach (or my row home in detroit, depending on those assumptions)

For me, peace of mind is a mortgage payment that i’ll be able to make every month and have money left for fun and investment.

Again, thanks for the brain food!

]]> By: Vijay http://www.youneedabudget.com/blog/2005/15-vs-30-year-mortgage-a-risky-dilemma/#comment-288 Vijay Wed, 20 Oct 2010 06:14:47 +0000 http://www.youneedabudget.com/blog/?p=92#comment-288 Jesse, Most intelligent article I have seen on the topic. Most people simply ignore the fact about the investment potential of the montly payment saving of the 30 year loan. Regards, Vijay Jesse,

Most intelligent article I have seen on the topic. Most people simply ignore the fact about the investment potential of the montly payment saving of the 30 year loan.

Regards,

Vijay

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