First house! 20% down on 280k! 15 year vs 30 year?

[mcwick]

We did a 15 year note and set it up to autopsy biweekly instead of monthly, which basically means we will pay it off in roughly 12 years instead of 15. It sounds like you guys would be fine doing the 15 year note. It's a nice feeling knowing I've got less than 6 years left on my note, and seeing the balance go down so quickly feels great.

[teachbeach]

Ask about a 20 year...just to see if it's something doable with your income(s). Otherwise I would go with the 30 year and pay more towards principal when you are able..some people set up a payment plan for every 2 weeks, which equates to 13 monthly payments annually.

Take the extra income and invest it~increase your contributions to tax shelter or your emergency fund. You never can predict when you might need to add a car payment, reduce work hours or add the expense of daycare for children, or if one person would happen to lose a job and have to spend xx months looking for another. If in 10 years you decide to pay off early, you can either refinance or increase your payments to principal and still end up having had a 15 or 20 year mortgage and money in the bank or retirement investments.

Home ownership can be stressful enough without the feeling of being "house poor" or living in a money pit.

[Jlong2315]

Originally Posted by Peerless

Hi all,

First and foremost I LOVE this forum. I've been on here a while now (more of a lurker) but have taken your wonderful advice/tips on life to heart!

My wife and I are purchasing our very first home.

Some quick facts: We are debt free. We live on a budget (every-dollar is a great app!), have no kids, and combined bring a take home pay of ~6100/month on average. We have on estimate about $103k to our name today. Unfortunately, 90k+ is just sitting in a high yields savings account earning a measly 1.05% return. (I know, I know...) But I am in the Wisconsin Retirement System through the hospital I work at, and am contributing 6.8% of my check while my employer matches 8.1% for a total for 14.9% towards retirement.

We purchased a house for $280,000.

We plan on putting down 20%, which will bring our loan amount to $224,000. Our "savings" would subtract to around $44,000.

Met with the mortgage consultant today to discuss mortgages.

Here are the numbers with a 224k loan amount:

30 year @ 4%
1069 Principle / Interest
~70 Insurance
451.68 Property Taxes

1590 Total/month


15 year @ 3.375%
1587 Principle / Interest
~70 Insurance
451.68 Property Taxes

2108 Total/month


Obviously, the 15 year loan would be payed off quicker while saving a butt load in interest, like $100k:

15yr total interest = $61,772

30yr total interest = $160,988



But then again, a 30yr would provide sort of a safety net if something life changing happens (broken down car, etc, baby?, etc). With that said, I was also told there isn't any pre-payment penalty with paying off the 30 year earlier.


So what do you guys think? I'm eager to hear thoughts/advice/criticism(constructive? :-D ).

Thanks guys.

I recently bought my first house. I signed up for a 30 year 4.125%. I put down less than 20% I pay it like a 11 year. I'm hoping when I hit the 20% mark interest rates are lower then I'll probably refi. I did the longer term because I wanted to have cushion from random life events if I needed it. If you're not discipline and don't think you'll actually make the extra payments then just go with the 15 year. I just used an online calculator to figure out what I needed to pay each month.