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Old 05-28-2012, 09:45 AM
 
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15-Year Mortgages Are Especially Appealing - MainStreet
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Old 05-28-2012, 10:06 AM
 
Location: Wisconsin
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Dave Ramsey has been saying this for years.

I don't think it's necessarily for everyone, but it's a lot more appealing than all the extra interest you end up paying on a 30 year mortgage. My wife and I moved in January and did a 20 year on our new place. We felt like this was a good compromise between the two more common options. I'm hopeful we'll be able to pay it off sooner, though. Having no mortgage payment would be a wonderful thing.
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Old 05-28-2012, 04:12 PM
 
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15 years makes sense "most" of the time in lower cost areas

But a 15 year mortgage in high cost area where homes are 500k and up maybe just too much to afford.

The best is paying cash and avoiding interest altogether.
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Old 05-29-2012, 07:59 AM
 
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[quote=Gatornation;24495242]You should be taking out a 15 year mortgage
QUOTE]

How would you know?
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Old 05-29-2012, 08:09 AM
 
Location: Long Island, NY
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15 year mortgages are great if (1) you know 100% you can swing the payments even if you experience a job loss or medical emergency, and (2) you intend to have the property be your "forever home".

I would not do a 15 year mortgage - especially since in this economy, my husband or I can easily be dimissed from our jobs and forced into an unemployment line. Its easier to double up on those payments on a 30 year mortgage but not so much on a 15 year, where you are tied to a higher monthly amount which limits your spending significantly if that income suddenly disappears or is reduced.
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Old 05-29-2012, 08:14 AM
 
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Quote:
Originally Posted by LegalDiva View Post
15 year mortgages are great if (1) you know 100% you can swing the payments even if you experience a job loss or medical emergency, and (2) you intend to have the property be your "forever home".

I would not do a 15 year mortgage - especially since in this economy, my husband or I can easily be dimissed from our jobs and forced into an unemployment line. Its easier to double up on those payments on a 30 year mortgage but not so much on a 15 year, where you are tied to a higher monthly amount which limits your spending significantly if that income suddenly disappears or is reduced.
You just buy less house to afford the payments.
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Old 05-29-2012, 08:22 AM
 
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Originally Posted by Gatornation View Post
You just buy less house to afford the payments.
Again "less house" in places like San Francisco and Washington DC still mean a 3 bedroom/1 bathroom single family 1700 square feet 1950s/1960s style home for around 400-500K in highly desirable locations instead of the boonies that requires a 2 hour commute.

Florida real estate (where you can get a "lesser home" for less than 200K with all the amendities) vs. higher cost areas means you can't tell people to get a 15 year mortgage.

Or else they end up in a 1 bedroom condo with 2 kids up in the northeast if they were to live in a lesser place.

And people can't move because those are places where there are jobs.
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Old 05-29-2012, 10:52 AM
 
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Originally Posted by aneftp View Post
Again "less house" in places like San Francisco and Washington DC still mean a 3 bedroom/1 bathroom single family 1700 square feet 1950s/1960s style home for around 400-500K in highly desirable locations instead of the boonies that requires a 2 hour commute.

Florida real estate (where you can get a "lesser home" for less than 200K with all the amendities) vs. higher cost areas means you can't tell people to get a 15 year mortgage.

Or else they end up in a 1 bedroom condo with 2 kids up in the northeast if they were to live in a lesser place.

And people can't move because those are places where there are jobs.
Income is about double in San Fran so the compare doesn't make a ton I sense. If you only can afford a 1 bedroom on a 15 year lOan you are making very little compared to the people living around you.
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Old 05-29-2012, 11:11 AM
 
Location: Long Island, NY
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Originally Posted by Gatornation View Post
Income is about double in San Fran so the compare doesn't make a ton I sense. If you only can afford a 1 bedroom on a 15 year lOan you are making very little compared to the people living around you.
I am with aneftp on this one - for that, you get less house - and the point of people moving is usually to get bigger space (esp if there are babies in the picture). In many areas, esp NYC, housing costs are already high and there is not much wiggle room between apartments (condos/co-ops) and homes. 2bedroom condos go for easily $350K with property taxes/HOA dues on top to boot...Incomes are higher because housing is higher. A 250K house in NYC (if you can even find any in that range) gets you a crack infested dump in the ghetto sections or a tiny studio, in my old area of Queens - a decent 2 bedroom condo goes for $ 225K, and thats not including HOA dues/taxes. God forbid you are looking to actually buy in Manhattan itself - where the prices are even astronomically higher than in the outer boroughs of Brooklyn/Queens/Bronx.

My husband and I can afford a 15 year fixed rate mortgage on our house, but it isnt going to happen because we would rather put that extra $ 1,500/month payment in a tangible and cash-liquid investment like a CD, IRA, savings account than tie it up in vanishing home equity. There are many reasons to pick a 30 year mortgage over a 15 year...as I stated in my earlier post. The teaser with 15 year mortgages is the lower interest rates --but if you think about it, most borrowers can get the same rate on a 30 yr if they are willing to pay points up front at the closing table.
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Old 05-29-2012, 11:14 AM
 
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Originally Posted by LegalDiva View Post
I am with aneftp on this one - for that, you get less house. In many areas, esp NYC, housing costs are already high and there is not much wiggle room between apartments and homes. Incomes are higher because housing is higher. My husband and I can afford a 15K fixed rate mortgage on our house, but it isnt going to happen because we would rather put that extra $ 1,500/month payment in a tangible and cash-liquid investment like a CD, IRA, savings account than tie up in vanishing home equity.
At a rate of return at 1%? You also need to account for all extra interest uphill be paying. The calculation is much more complicated than I'll take the difference and invest. The extra payment for many would not be 1500 more.
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