30 year loan vs 15 year loan mortgage

Run the numbers, what is the rate diffrence? I would prob go with a 30 yr but pay additional principal each month to equal the 15 yr, and would have a built in cushion if I hit hard times

I agree about the 20%, if you are that close, save up the extra 5%. As far as 30 vs 15, nobody here can answer that question for you without knowing your complete financial situation. If you have a stable job and can easily afford a 15 yr, then that is likely the answer.

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The problem is that when you don't have a lot of down payment so much your first 3 years is going to interest and not principle that if you end up needing to sell in the first 3 years theres a good chance you may be selling for a loss after closing costs.

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How would the amount of down payment affect the percentage of payment going to principle in the first 3 years, or for any period?

I'd do 15 years. You will end up paying more than 2x the amount in interest with 30 years. But goodluck to whichever you decide.

Yup. I was a 30 year guy when I bought my 1st property. After i refi to a 15 year mortgage, I was done with the 30 year.

From your example of a 250k mortgage, total interest breakdown:

@3.5%, 30y = 154k
@3.5%, 15y = 71k

@4%, 30y = 179k
$4%, 15y = 83k

Now, i understand that some people can only afford 30y payments while trying to be a homeowner. That's fine. They can alway refi later. But if you can afford 15 year mortgage, that would be a better option.

30 year proponents may say you can get tax deductible from interest payment. Yeah, but I rather be debt free so noone can bother me each month.

you give me 3% money for 100 years, im taking it. But if uncomfortable owing someone money for long periods of time, take the shorter term.

Good Luck!

Or buy a house with 15 year that you can afford to pay extra principal on

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Personally the biggest answer to 15yr to 30 yr is the interest rate spread... If you are getting a 3.8% rate at 30 years but a 2.9% rate or something like that 15 year.... That 1% is likely worth taking the 15 year loan.

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We had a 30 year mortgage at around 3.9%. We were paying over $500 extra each month on an $1100 note (we put almost 50% down on this house). We're just starting to meet with some financial advisors and one of things that was suggested is to not pay so much extra. There are better things that money could do.

He did suggest looking at at 15 year at a lower rate if possible. We sign the papers tomorrow on a 15 year note at something like 2.7%. My wife deals with this so I'm not completely sure on the details. But the new note will still be at least $200 less than what we were paying on the 30 year after we plussed it up.

If you're just starting out and things are tight and you haven't built up a big emergency fund or portfolio, I would probably recommend the 30 year note. Pay a little extra and build up your net worth. The reality is that shite happens. People get sick, jobs disappear, kids pop up and so on. A good recommendation is 6 months of expenses saved up that you can easily get to (401K doesn't count). I would recommend you have more than that to also deal with the issues that come up in home ownership.

If you're a little older and/or have significant savings then I would recommend looking at the 15 year. In our situation, we have more than enough in reserves to carry us a long time if one or both of us lost our jobs or something big happened.