re: What’s the downside of 15 year mortgage?

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What’s the downside of 15 year mortgage?

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We have one and one of the issues is flexibility. If we want to rent it out the rent has to be higher due to our payment. In hindsight we probably should have just did a 20 or 30 but the rate was just so damn good we jumped on it. The positive is we will be done in 5 years. The shite has flown by. I'm chasing that zero debt feeling.

Pls explain like I’m 5

The downside is that if you lose your job or get a paycut, you are still obligated for that higher monthly payment while it would be much less than a 30 year.

I refinanced my house at 15 years. Last property I bought I did a 30 year, but plan to pay it off in 5 years.

If you are dead certain that you will pay it off in 10 years, then go with the 15 year and save a little interest.

Normally I’d be ok with this but 2 things:

My compensation is 50% stocks so hard to keep diversified

Having high rate debt and same return assets seem odd since if we get rid of debt it’s like making money anyways

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Pls explain like I’m 5

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Well typically the APR on a mortgage is designed to capture the fees included in the loan and quote them as a rate. If toure comparing loans of similar types 5yr arm to 5yr arm, for example, APR can be a better way to compare them than the interest rate alone.

Additional Info

You should ask for a loan estimate to get the full picture.

As far as what you were quoted, those were 5-yr adjustable rate mortgages amortized over 30 years. In other words, your rate is locked for 5 years, but is then subject to market rates, but your initial payment assumes the rate stays the same and payments are spread over 30 years. After 60 months, both your rate and your payments are subject to change.