15 or 30 yr mortgage??

[jlm]

We are thinking of refi that rates are sooo low! We are 5 yrs into our current 30 year mortgage. If we go with a 15 year it will raise our pymts 200.00/month. If we start at 30 again it will lower them 229.00/month. The 15 year will be a pinch...but we could do it. I'm just worried about what we will have to give up to do it. The thought of starting over at 30 yrs bugs me too! I know we would not put extra $$ towards it to pay off sooner...it just never happens even with our good intentions!! I really don't want to stay where we are, because the rates are so much better right now.
Any suggestions, thoughts are much appreciated!!
Jen

 

[Katy Belle]

If you don't want to do the extra $200 a month, then go for the 30 yr loan, but keep paying what you are paying now. Do you have it set up as an automatic withdrawl? If not, do it! You won't miss it, its what you've been paying anyway! Someone more money savvy than me could tell you when you will pay it off, paying that much extra a month.

 

[elgerber]

We are thinking of refi that rates are sooo low! We are 5 yrs into our current 30 year mortgage. If we go with a 15 year it will raise our pymts 200.00/month. If we start at 30 again it will lower them 229.00/month. The 15 year will be a pinch...but we could do it. I'm just worried about what we will have to give up to do it. The thought of starting over at 30 yrs bugs me too! I know we would not put extra $$ towards it to pay off sooner...it just never happens even with our good intentions!! I really don't want to stay where we are, because the rates are so much better right now.
Any suggestions, thoughts are much appreciated!!
Jen

Some companies will let you have a 25 year term, that would lower your payments without increasing your payoff time.
Alternately, you can do the 30 and make extra principal payments when you can and pay it off earlier that way.

 

[bettymae1121]

Why not split the difference and look at a 20 year loan?

 

[budbeerlady]

Take the 30, you never know what the next 15 years will bring and pay it off early. Keep paying what you have been and pay it off early. IF something happens you will have less stress than trying to come up with a huge payment.

 

[mrsklamc]

Rarely does someone take the 30 and actually pay more on it to get rid of it in 15.

Don't think of what you would be giving up to pay it off with that $200/mo- think of what you WON'T have to give up for the 15 years that you have NO MORTGAGE.

Have you done just the plain math of what you would be saving with a 15 rather than a 30?

 

[Brer Shay]

Ask your banker (or find for yourself) an amortization table for the time frame you want is paid off in - regardless of what term the loan is. We just refi-d last week with a 30 year, but I actually plan to pay ours in 19 years. I got a copy of the amortization schedule for that payoff time and that is what I pay. I keep a copy with my bills so I'm not tempted to lower my payment. I've been doing this with each home we've bought over the last several years so that our mortgage will be paid off 30 years after the purchase of our first house.

 

[ssawka]

Why not split the difference and look at a 20 year loan?

That's what we did! A 20yr.

 

[Tigger73]

No question - Go with a 15 year loan. More than likely the interest rate is about .50% lower than the 30 year loan. In addition, after the first 18 months, you will not even feel the extra $200. In the end, on a $200,000 mortgage you'll save about $90,000 in interest by paying it off in 15 years - that's at least 15 trips to Orlando!

 

[wdwmom0f3]

Rarely does someone take the 30 and actually pay more on it to get rid of it in 15.

Don't think of what you would be giving up to pay it off with that $200/mo- think of what you WON'T have to give up for the 15 years that you have NO MORTGAGE.

Have you done just the plain math of what you would be saving with a 15 rather than a 30?

Exactly. We are in the process of doing the same thing right now and by knocking off the extra years, we have saved 100K in interest PLUS we will pay our house off early.

 

[cmrules]

Go for the 15! You won't regret it. It may be tight now, but in a couple of years you will have totally adjusted and have cut 15 YEARS off your mortgage.

 

[kacaju]

if you can swing it do a 15 year. We did and I only have 7 years left on my mortgage!!
I can't tell you how great it is to see the mortgage payment drop every month!!

 

[An72]

Haven't think about it yet..

 

[mrsklamc]

if you can swing it do a 15 year. We did and I only have 7 years left on my mortgage!!
I can't tell you how great it is to see the mortgage payment drop every month!!

Yeah, think of it this way; in 8 years, do you want to be saying "I have 7 years left on my mortgage' or "I have 22 years left on my mortgage."?

 

[mikehn]

A 15 year mortgage is great, in that Im gonna have a windfall of monthly cash in a few years. The horrible part that Im experiencing right now is that I have very little mortgage interest to deduct on my taxes, which is killing me come tax time.

 

[castanhope]

We have a 15 year loan which matures in 7 years, but I'm paying extra on it so it will be paid off in 3 years. The way I look at it is, if I have that extra few hundred dollars per month right now, what will I do with it? I'd probably end up eating out more, going on more "mini-vacations" (we still have enough money to vacation, but only once every year or two right now), and buying more clothes and crap that my kids don't actually need. That extra per month right now might make for less budgeting and more flexibility to buy things, but it would not be life changing in any sense. By paying that extra bit each month now, in just 3 years I will have an extra $1200-1300 per month!! Now for us, that will be life changing. That's the ability to completely remodel our kitchen, which we can't even think about now but desperately need. That's lots of traveling before our kids are grown, which is not something we can do right now. That's paying college tuition for our kids instead of paying a mortgage. It's paying cash for a new vehicle after saving for just a year or so...and tons of other things like that. Not to mention the interest you save like the other posters have already pointed out.

So if you can swing it without being totally stressed out, definitely go for the 15 year, it's a no-brainer. Good luck!

 

[DawnM]

I wish we had gotten a 15 year 14 years ago when we bought our first house!

We have a 15 year now (refi from 30) and it is worth the extra $$ going toward the principal. The bottom line savings is HUGE!

Dawn

 

[ssawka]

I already posted about a 20yr mortgage, but if you have any doubt about ever making the 15yr mortgage, you are better off getting a longer term mortgage and paying it off early. Just make extra payments each month. Also, this gives you more flexibility if you need to take on additional debt. Your mortgage should be one of the last debts you pay off since it is the only one (other than student loans) that may be tax deductible.

 

[crisi]

Rarely does someone take the 30 and actually pay more on it to get rid of it in 15.

Don't think of what you would be giving up to pay it off with that $200/mo- think of what you WON'T have to give up for the 15 years that you have NO MORTGAGE.

Have you done just the plain math of what you would be saving with a 15 rather than a 30?

We are atypical but when we refinanced (after about three years in our house) we refi'd for 30 years and paid it off in FOUR. It had a balloon in seven - I told the mortgage rep we wouldn't hit that balloon. She looked at me like I was nuts - then must have gotten a notice when we paid it off because she called me and said "I thought you were nuts."

Why, when I had that sort of money coming in did I not go with a shorter term (which would have had lower interest rates, by a tiny fraction)? Because we'd JUST gone through a job scare and I wanted to make sure we would be able to pay our mortgage on a single income - or even unemployment - if we had to.

I'm a huge fan of free cash flow. So - when I take out a loan I have the smallest monthly obligation possible, but I don't have many month obligations because that impacts my discretionary cash flow. The bigger the gap every month between what I bring in and what I HAVE to pay out, the happier I am.

The big thing for the OP though is "will you even qualify for a refi?" If you are underwater on your house - which a lot of people who bought five years ago are, you'll need to make up the difference in order to refi.

 

[spiceycat]

getting another mortgage shortly and for the first time getting a 30 year mortgage - my other 2 were 15 year mortgages.

but now retired and although will get more money in 2 years if not sooner - in this economy longer seems to be better.

besides with 3.99% for a 30 year mortgage - hey my 15 year mortgage was 9% next one was 6%.

at 3.99% 30 year is fine - besides you can pay if off early with 30 years - with 15 years it is harder. banks are impressed if you pay off early.