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Mortgage: Fixed 30 years interest rates


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#16 ARSEN

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Posted 27 September 2012 - 10:59 AM

Will do. Thanks.

#17 Cyberjag

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Posted 27 September 2012 - 11:29 AM

I cannot do 15 years. I got a wedding coming up and I'm first time home buyer.


Is it that you can't or won't? What is the real difference in payments?

If you're locked in to a 30 year, you're almost better off renting.

#18 ARSEN

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Posted 27 September 2012 - 11:38 AM

Can't. I got a really good deal on a house, I can actually resell it for $50k more in 1-2 years.

#19 Jase

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Posted 27 September 2012 - 11:47 AM

Is it that you can't or won't? What is the real difference in payments?

If you're locked in to a 30 year, you're almost better off renting.

The difference between a 30-year and 15-year mortgage rate isn't much these days. (0.5%-ish?)

That translates to 30-40 dollars extra on each payment per $100,000 of mortgage to pay a 30-year mortgage off in 15 years versus paying off a 15 year mortgage off on-schedule.

the insurance against losing your job is worth it to me to go with a 30-year over a 15-year.

#20 ARSEN

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Posted 27 September 2012 - 11:52 AM

What's the insurance against loosing ur job u talking about?

#21 ARSEN

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Posted 27 September 2012 - 11:52 AM

What's the insurance against loosing ur job u talking about?

#22 thefuzz

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Posted 27 September 2012 - 11:58 AM

What's the insurance against loosing ur job u talking about?



He is just saying that if push came to shove he could go back to original lower payment of the 30 year if he were to have a bad month, or lose his job.

Otherwise he would pay extra toward the principle every month and make it act like a 15 year.

Funny thing is though, less than 5% of the country consistently pays more that the mortgage payment.

#23 thefuzz

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Posted 27 September 2012 - 11:59 AM

Is it that you can't or won't? What is the real difference in payments?

If you're locked in to a 30 year, you're almost better off renting.



Disagree, the tax benefits and very low mortgage rates offset that by at least a few hundred dollars per month.

I am not talking house vs. apt, but house vs. equal house on rental market.

#24 Jase

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Posted 27 September 2012 - 12:12 PM

He is just saying that if push came to shove he could go back to original lower payment of the 30 year if he were to have a bad month, or lose his job.

Otherwise he would pay extra toward the principle every month and make it act like a 15 year.

Funny thing is though, less than 5% of the country consistently pays more that the mortgage payment.


I used to be one of the 5%.

Then I had another kid. :(

#25 thefuzz

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Posted 27 September 2012 - 12:23 PM

I used to be one of the 5%.

Then I had another kid. :(



I can't imagine.

What's funny about that is people don't realize how much an extra $50-$100 per month every month toward principle will do for you.

Literally save you tens of thousands of dollars.

#26 MadHatter

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Posted 27 September 2012 - 12:40 PM

If you can swing a 15 year, rates are better still and costs are significantly reduced over the life of the loan.


Unless you are about 45 years old or older, entering into a 15 year mortgage is not smart. Given the extremely low interest rates on mortgages and the tax dedictiblity factor, you are better off paying a lower payment and investing the incremental amount.

Not to mention that the mortgage tax credit is the primary reason that most Americans are able to itemize their deductions. By having to take the standard dededuction (instead of your itemized deduction with mortgage decuction), you are likely to pay a higher effective tax rate.

Again....30 year mortgage and invest the additional amount that you would have paid on the 15 year mortgage. You will come out better off 99% of the time.

#27 MadHatter

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Posted 27 September 2012 - 12:42 PM

I can't imagine.

What's funny about that is people don't realize how much an extra $50-$100 per month every month toward principle will do for you.

Literally save you tens of thousands of dollars.


But when the effective rate is only about 2% (actual rate minus the impact of it being tax deductible), you are better off investing the additional $100. You are almost guaranteed to earn significantly more than a 2% return over a several year period.

#28 Cyberjag

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Posted 27 September 2012 - 03:54 PM

Unless you are about 45 years old or older, entering into a 15 year mortgage is not smart. Given the extremely low interest rates on mortgages and the tax dedictiblity factor, you are better off paying a lower payment and investing the incremental amount.

Not to mention that the mortgage tax credit is the primary reason that most Americans are able to itemize their deductions. By having to take the standard dededuction (instead of your itemized deduction with mortgage decuction), you are likely to pay a higher effective tax rate.

Again....30 year mortgage and invest the additional amount that you would have paid on the 15 year mortgage. You will come out better off 99% of the time.

I think Dave Ramsey would thoroughly disagree. :)

And you're assuming that the balance would actually be invested. How often does that actually work out?

#29 thefuzz

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Posted 27 September 2012 - 04:12 PM

But when the effective rate is only about 2% (actual rate minus the impact of it being tax deductible), you are better off investing the additional $100. You are almost guaranteed to earn significantly more than a 2% return over a several year period.



Disagree with you here.

Pay off debt as soon as possible, no matter what.

The problem is, only very dedicated folks will take the time to actually invest that extra 50 or 100.

IMO a paid off house that you can never lose is an unbelievable place to be.

Pay off the house in 15 year or less, and then you can really invest when you don't have a mortgage.

#30 Niner National

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Posted 27 September 2012 - 05:07 PM

I can't imagine.

What's funny about that is people don't realize how much an extra $50-$100 per month every month toward principle will do for you.

Literally save you tens of thousands of dollars.

I haven't done this yet, but I plan to start soon.

I've wanted to built up a little bit of a buffer in case I ever lose my job (enough to live for 6 months or so after unemployment pay runs just in case the worst happens). Once I get to the goal I've set for myself (only need a couple thousand more), I plan to take half rental income I get from my two roommates and pay towards the principal every month. This will be the equivalent of making 6 extra mortgage payments per year.

Figure I might as well take advantage of them while I have them because I won't have, or want, roommates several years from now.


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