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I agree with many of the others. Investing the extra payments depends on how comfortable you are with risk. I pay extra payments to my mortgage and take the guaranteed return rather than risk possibly making more on my money. It's simpler and less risky.
It's what I started doing recently. I've already paid down 8 years worth over 4 years. Decided to invest half the extra money, with the goal of paying off the loan in one chunk in 8 years, taking my original 30 yr loan down to a bit over 12 years.
Personally, I believe the 30 year loan is better. It's less risky in case anything happens and you have the option to pay it off earlier if you want.
30 years means you have signed your entire life over to a bank.
You're paying a huge amount more in total interest as well.
How do I put this........You're wrong.
depends , at these rates it may be a gift from the banking gods .
can you imagine only paying 4% interest or so in a 5-7% world . rates are still well below historical norms .
i like 30 year mortgages as you can always pay them in 15 at a slight penalty but try dragging out a 15 year mortgage if one of the big three happen - illness-job loss- divorce and let us know how that worked out for you .
depends , at these rates it may be a gift from the banking gods .
can you imagine only paying 4% interest or so in a 5-7% world . rates are still well below historical norms .
I never worried about the rate I was paying -- I only worried about the total amount of money my house was going to cost me, along with how long it was going to take to pay it off. I simply love not having a bank send me a mortgage statement.....it's freedom.
30 year mortgages encourage people with limited financial skills to buy more house than they need.
30 years means you have signed your entire life over to a bank.
You're paying a huge amount more in total interest as well.
How do I put this........You're wrong.
This is just overly dramatic. You aren't signing your life away anymore than a 15 year mortgage and you pay more interest simply because you have the functionality of borrowing the money longer. You can't tell someone they are wrong for their personal opinion they'd rather pay the rate preimuim to have the option to borrow for twice the amount of time so they have a better position cash flow wise if they need it
This is just overly dramatic. You aren't signing your life away anymore than a 15 year mortgage and you pay more interest simply because you have the functionality of borrowing the money longer. You can't tell someone they are wrong for their personal opinion they'd rather pay the rate preimuim to have the option to borrow for twice the amount of time so they have a better position cash flow wise if they need it
Agreed.
I got my 30 yr at 3.5%. At the time I did the refi I was working contract, with no guarantee how long it would go or how long it would take me to find another job after it ended. The flexibility of lower monthly payments from a 30 year loan was an important component.
I consider this the best of both worlds. I have the option to pay off that 30 yr loan as fast as I can, with no penalty, but if/when I need some breathing room due to job loss or fluctuating income or a month where I have a large expense, it's nice to be able to stop the extra principal payments. If things go okay, I should have that 30 yr mortgage paid off in under 13 years elapsed time from the day the loan was funded. And if it takes longer, c'est la vie. I think that's quite reasonable.
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