Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
To the original question(s), I've done a mix. Initial home at age 27 was 30-year of course, but after paying for many years and increasing job income, we refinanced to a 15-year. With a much lower interest rate, our payments we only a few hundred more per month - not double.
Next house was a 7/1 ARM, which we got knowing the risks but also knowing we'd only be there 5-6 years, and the rate was something near 2%. Ended up paying it off.
Now at age 47 in a new state, we hoped to get a house at a similar price. Alas, prices are higher here so, despite downsizing, we faced the mortgage question - how much are we comfortable with and for how long? Chose 15-year, but are comfortable with the monthly payment, and will be done just in time for retirement.
back when I had a mortgage, I'd do this. It became a bit of a PIA to keep track of it, so I just paid off the mortgage and said the heck with it. That was almost 20 years ago, and I've never regretted it.
We bought a wreck of a house and paid it off in 6 years. All that interest cuts into the profit. We bought our second house with cash and rented it. We bought our third house with a small home equity loan on our first property and paid it off in 6 months or so. We haven't had any car payments in about 30 years and have been totally debt free for over 20 years. I detest giving money to the legal loan sharks, and I love being able to retire early because we lived so far below our means.
I used to do the 30 year but pay extra thing because I didn't want to be locked into the higher payment. But last year, I refinanced into a 20 year because my payment was exactly what I had been paying all along and it was a comfortable amount and I got a lower interest rate.
I'll have a mortgage until I retire but I made this purchase (3rd home I've owned) knowing that ahead of time. It was worth it because it really is pretty much my dream home. Not a forever home but it's a perfect place for my son and me at this point in our lives.
We did a 30 year mortgage for a couple of reasons. The interest rate was quite a difference. I was about 3/4 of a percent MORE for the 15 year mortgage. We pay extra every month. If something happens and suddenly we can't pay the extra, no biggie.
We did a 30 year mortgage for a couple of reasons. The interest rate was quite a difference. I was about 3/4 of a percent MORE for the 15 year mortgage. We pay extra every month. If something happens and suddenly we can't pay the extra, no biggie.
that's unusual, any time I've checked rates, the shorter term always had lower rates.
that's unusual, any time I've checked rates, the shorter term always had lower rates.
At the time, it was pretty usual in my area for 15 and 20 year mortgages have a higher interest rate than the 30 year. We aren't through a national bank. We used a local bank. Many local banks here have 2 or 3 branches and that's it. I live in an area full of small towns.....there's a whole 3,500 people in the town I live in.
that's unusual, any time I've checked rates, the shorter term always had lower rates.
If rates are going down, there's some incentive to discount the 30 year to lock in current rates for longer. E.g., if you think about a 15 year loan followed by another 15 year loan at whatever the year 15 rate is, you'd expect the average to be similar to the 30 year rate in fair pricing (temporarily ignoring other criteria like liquidity). But the fact that you can typically prepay mortgages means this isn't usually a concern. Maybe prepayments weren't allowed or came with a steep penalty.
If rates are going down, there's some incentive to discount the 30 year to lock in current rates for longer. E.g., if you think about a 15 year loan followed by another 15 year loan at whatever the year 15 rate is, you'd expect the average to be similar to the 30 year rate in fair pricing (temporarily ignoring other criteria like liquidity). But the fact that you can typically prepay mortgages means this isn't usually a concern. Maybe prepayments weren't allowed or came with a steep penalty.
Yes, we got our current mortgage when rates were at historic lows...They started going up right after we closed. The bank stands to make far more money on you for 30 years than they do for 15 years.
I am 62 and buying my first house (alone). I doubt I will live to be 92 when it would be paid off but what do I care? It's a 2 bedroom 2 bath that I am buying for a very good price so I can relax a little and not worry about $$$ and my rent going up every year. My pension will more than cover my mortgage, not even accounting for my Social Security and my part time job. My kids will be in their 60's and I expect will have their own place by the time I pass from this world. It's a place to live and I will fix it up nice but it's not my dream home.
Last edited by chiluvr1228; 06-16-2017 at 05:26 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
