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atom1505
Member since Aug 2016
123 posts

20 or 30 year mortgage
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This post was edited on 4/26 at 11:54 am


StealthCalais11
LSU Fan
Lurker since 2007
Member since Aug 2011
8151 posts

re: 20 or 30 year mortgage
Take the 30 year, but pay the amount equal to a 20 year (or whatever desired timeframe). shite ever hits the fan and you end up needing extra cash you can back off and just pay the 30 year installment amount.


atom1505
Member since Aug 2016
123 posts

re: 20 or 30 year mortgage
That's my attitude as of now. I was just wondering if I was overlooking some other benefit of the 20 year.


Hawkeye95
LSU Fan
Member since Dec 2013
20293 posts

re: 20 or 30 year mortgage
quote:

That's my attitude as of now. I was just wondering if I was overlooking some other benefit of the 20 year.


saves you a lot of money.

How long are you going to live in the house? What is the local real estate market like?

If the local market is better than just ok and you aren't going to be there for more than 10 years, I would go with the 30 year.

If the market isn't so great, or you are going to stay for a long time, I would go with the 20 year.

It would be useful to know what % of your income the 20 vs. 30 year payment takes.


atom1505
Member since Aug 2016
123 posts

re: 20 or 30 year mortgage
(no message)
This post was edited on 4/26 at 11:54 am


Sacrifice_blunts
LSU Fan
Member since Jun 2013
223 posts

re: 20 or 30 year mortgage
Do a 15 over a 20 if you can. If not, do a 30 year and pay extra. Rates are the pretty much the same on a 20 & 30.

If you know you aren't staying for more than 5 years maybe consider an ARM.
This post was edited on 4/12 at 2:49 pm


StealthCalais11
LSU Fan
Lurker since 2007
Member since Aug 2011
8151 posts

re: 20 or 30 year mortgage
LINK

Chart in the article gives a basic understanding of the differences.


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atom1505
Member since Aug 2016
123 posts

re: 20 or 30 year mortgage
quote:

If you know you aren't staying for more than 5 years maybe consider an ARM.


ARM gives me pause just because of the current state of the market. If it were 3 years ago, I'd think differently.


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Hawkeye95
LSU Fan
Member since Dec 2013
20293 posts

re: 20 or 30 year mortgage
I dont think you can go wrong here.


atom1505
Member since Aug 2016
123 posts

re: 20 or 30 year mortgage
As of now, I think I'm going to go with the 30.


I do plan on getting some numbers for a 7/1 ARM tomorrow, so I'll post whenever I get those. Like I said, I doubt we're in the house for more than 7 years, but life happens. Depending on the interest caps, I may consider it.


Hawkeye95
LSU Fan
Member since Dec 2013
20293 posts

re: 20 or 30 year mortgage
I wouldn't touch an ARM right now, rates are going up. and its not like you need to use it to get in this house.



AUjim
Auburn Fan
America
Member since Dec 2012
1612 posts

re: 20 or 30 year mortgage
quote:

I wouldn't touch an ARM right now


Just wanted to add that I totally agree.
This post was edited on 4/13 at 11:45 am


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atom1505
Member since Aug 2016
123 posts

re: 20 or 30 year mortgage
I agree. Can't hurt to look at some numbers though.


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foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
36912 posts

re: 20 or 30 year mortgage
Good on you for thinking this through instead of going with the kneejerk "I hate debt, Dave Ramsey told me so!" but the rate spread here is somewhat small.

I'd set up an amortization table and figure out the difference in NPV is for both. Be sure to include guesstimates of any investment returns, inflation, and the interest tax deduction if you qualify. Also don't forget investment returns from after year 20.


atom1505
Member since Aug 2016
123 posts

re: 20 or 30 year mortgage
How would y'all's advice change if I were to hold onto this house at the time I would've otherwise sold it and rent it? Rents in this neighborhood are pretty high margin, so that's something that's on my radar at the moment.


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btnetigers
LSU Fan
South Louisiana
Member since Aug 2015
1061 posts

re: 20 or 30 year mortgage
I just got a 30 yr at 3.875%.


Oenophile Brah
LSU Fan
The Edge of Sanity
Member since Jan 2013
7263 posts

re: 20 or 30 year mortgage
quote:

I just got a 30 yr at 3.875%

With whom?


foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
36912 posts

re: 20 or 30 year mortgage
quote:

I wouldn't touch an ARM right now, rates are going up


If the first five years are locked, then it fits the OP's needs just great. The only problem is if the plan changes and he decides to hold onto the property.


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btnetigers
LSU Fan
South Louisiana
Member since Aug 2015
1061 posts

re: 20 or 30 year mortgage
quote:

With whom?



GMFS


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atom1505
Member since Aug 2016
123 posts

re: 20 or 30 year mortgage
(no message)
This post was edited on 4/26 at 11:54 am


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