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Mortgage Question?
Topic Started: Mar 7 2008, 04:27 PM (115 Views)
Luke's Dad
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Emperor Pengin
M&M's and I are about 12-18 months out from buying a house. We're doing as much research as we can, and I need your guys opinions on something. Generally speaking, is it better to purchase on a 20 year fixed mortgage with higher payments, or a 30 year fixed mortgage but doubling up on your payments?
The problem with having an open mind is that people keep trying to put things in it.
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Jolly
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Geaux Tigers!
It's been my experience that the road to Hell is paved with good intentions...

A lot depends on how much of a stretch that 20 year note would be, vs the 30 year note. The problem with doubling up (and you don't have to do that, it works out to a good bit less) is something else always comes up...
The main obstacle to a stable and just world order is the United States.- George Soros
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kluurs
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Fulla-Carp
are you getting a break on the interest with the 20 year?

I got a break with a 15 year mortgage - and went to the every other week payment scheme so that it actually will be paid off much sooner. OTH, now I really don't want to pay it off that much sooner - because I have a 4.375% interest rate - locked in....
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kenny
HOLY CARP!!!
kluurs
Mar 7 2008, 04:36 PM
are you getting a break on the interest with the 20 year?

I got a break with a 15 year mortgage - and went to the every other week payment scheme so that it actually will be paid off much sooner. OTH, now I really don't want to pay it off that much sooner - because I have a 4.375% interest rate - locked in....

Yes you should/will get a lower interest rate with a shorter term. But you are obligating yourself to that higher payment.

If you want the flexibility of the lower payment (but just want to pay extra most months) then go with a longer term at the higher interest rate.
This is groovy because if you get laid off or something you can make a lower payment each month.

I think another thing you can do to end up paying less interest in the long run is instead of paying, say $1500 a month, pay $750 twice a month.
I don't think that all banks allow this but if they do you end up saving thousands of bucks over the life of the loan.
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justme
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HOLY CARP!!!
15 year-fixed. LD, call Mark on his cell phone if you want advice. I'll send it through a PM. He'll be fair, honest and objective with you.
"Men sway more towards hussies." G-D3
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JBryan
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I am the grey one
15 year fixed will save you a ton of interest over a 30 year fixed and the interest rates are always lower. The only question is if you can handle the higher payments. I would try awfully hard to answer "yes".
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Mikhailoh
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If you want trouble, find yourself a redhead
kluurs
Mar 7 2008, 08:36 PM
are you getting a break on the interest with the 20 year?

I got a break with a 15 year mortgage - and went to the every other week payment scheme so that it actually will be paid off much sooner. OTH, now I really don't want to pay it off that much sooner - because I have a 4.375% interest rate - locked in....

WOW! YOU ARE A FINANCIAL GOD!!!!

No kidding, Kluurs - I thought I was doing well at 5.125 on a 15!

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