Comments on: A Thought on 15 vs 30 year Mortgages http://www.joetaxpayer.com/30-year-mortgages/ Financial Commentary For The Average Joe Mon, 06 Feb 2012 21:56:17 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: With Apologies to Dave Ramsey, One Size Doesn’t Always Fit All http://www.joetaxpayer.com/30-year-mortgages/comment-page-1/#comment-19766 With Apologies to Dave Ramsey, One Size Doesn’t Always Fit All Mon, 05 Apr 2010 09:22:21 +0000 http://www.joetaxpayer.com/?p=2685#comment-19766 [...] Fixed rate? Definitely. 15 year? Hmmmm. Are there times when stretching the loan farther makes sense or should all home buyers in all circumstances always get 15 year mortgages? Dave’s criteria are to be out of debt, have a 3-6 month emergency fund in place and set your price range by buying a home on a 15 year note that will keep your payments at 25% or less of your take home pay. Great guidelines, but what if there are no safe neighborhoods in your price range within driving distance of work? Or what if one of the incomes in a two income family is fragile? Or if one spouse is contemplating becoming a stay at home parent? Would there not be some wisdom in giving some cushion by stretching the loan to a 20 or even a 30 year time. To dig a little deeper in how the interest rate itself affects the comparison of loan terms, read Joe Taxpayer’s A Thought on 15 vs 30 Year Mortgages. [...] [...] Fixed rate? Definitely. 15 year? Hmmmm. Are there times when stretching the loan farther makes sense or should all home buyers in all circumstances always get 15 year mortgages? Dave’s criteria are to be out of debt, have a 3-6 month emergency fund in place and set your price range by buying a home on a 15 year note that will keep your payments at 25% or less of your take home pay. Great guidelines, but what if there are no safe neighborhoods in your price range within driving distance of work? Or what if one of the incomes in a two income family is fragile? Or if one spouse is contemplating becoming a stay at home parent? Would there not be some wisdom in giving some cushion by stretching the loan to a 20 or even a 30 year time. To dig a little deeper in how the interest rate itself affects the comparison of loan terms, read Joe Taxpayer’s A Thought on 15 vs 30 Year Mortgages. [...]

]]> By: Yakezie Challenge / Weekly Roundup « Armada Media Blog Issues http://www.joetaxpayer.com/30-year-mortgages/comment-page-1/#comment-19717 Yakezie Challenge / Weekly Roundup « Armada Media Blog Issues Thu, 01 Apr 2010 00:58:47 +0000 http://www.joetaxpayer.com/?p=2685#comment-19717 [...] Should you ALWAYS get the 15 year mortgage instead of the 30year?  Joe Taxpayer gives us pause for thought in A Thought on 15 vs 30 year Mortgages [...] [...] Should you ALWAYS get the 15 year mortgage instead of the 30year?  Joe Taxpayer gives us pause for thought in A Thought on 15 vs 30 year Mortgages [...]

]]> By: March Links Roundup: Yakezie Challenge Edition http://www.joetaxpayer.com/30-year-mortgages/comment-page-1/#comment-19710 March Links Roundup: Yakezie Challenge Edition Wed, 31 Mar 2010 12:03:48 +0000 http://www.joetaxpayer.com/?p=2685#comment-19710 [...] A thought on 15 vs 30 year mortgages: Joe discovers that it’s tougher than ever to pay off your mortgage faster! Find out [...] [...] A thought on 15 vs 30 year mortgages: Joe discovers that it’s tougher than ever to pay off your mortgage faster! Find out [...]

]]> By: JAL http://www.joetaxpayer.com/30-year-mortgages/comment-page-1/#comment-19680 JAL Mon, 29 Mar 2010 17:33:20 +0000 http://www.joetaxpayer.com/?p=2685#comment-19680 To Sam: You're right... we have two incomes. I also have two children and one cat! To Sam:

You’re right… we have two incomes. I also have two children and one cat!

]]> By: Sam http://www.joetaxpayer.com/30-year-mortgages/comment-page-1/#comment-19656 Sam Sun, 28 Mar 2010 19:02:01 +0000 http://www.joetaxpayer.com/?p=2685#comment-19656 JAL - you annoy me. You forgot to mention that you have no kids. Anybody can easily do what you're doing with two incomes and no kids. JAL – you annoy me. You forgot to mention that you have no kids. Anybody can easily do what you’re doing with two incomes and no kids.

]]> By: Yakezie Challenge / Weekly Roundup http://www.joetaxpayer.com/30-year-mortgages/comment-page-1/#comment-19624 Yakezie Challenge / Weekly Roundup Sat, 27 Mar 2010 10:00:43 +0000 http://www.joetaxpayer.com/?p=2685#comment-19624 [...] Should you ALWAYS get the 15 year mortgage instead of the 30 year?  Joe Taxpayer gives us pause for thought in A Thought on 15 vs 30 year Mortgages [...] [...] Should you ALWAYS get the 15 year mortgage instead of the 30 year?  Joe Taxpayer gives us pause for thought in A Thought on 15 vs 30 year Mortgages [...]

]]> By: Black Coffee: My Favorite Blogs, Money News & Opinions #39 http://www.joetaxpayer.com/30-year-mortgages/comment-page-1/#comment-19600 Black Coffee: My Favorite Blogs, Money News & Opinions #39 Sat, 27 Mar 2010 01:50:37 +0000 http://www.joetaxpayer.com/?p=2685#comment-19600 [...] rock in the middle of an enormously vast and wondrous universe: “What’s better – a 15-year or 30-year mortgage?”   (And if you ask me, it’s one that’s paid [...] [...] rock in the middle of an enormously vast and wondrous universe: “What’s better – a 15-year or 30-year mortgage?”   (And if you ask me, it’s one that’s paid [...]

]]> By: Len Penzo http://www.joetaxpayer.com/30-year-mortgages/comment-page-1/#comment-19575 Len Penzo Fri, 26 Mar 2010 22:06:31 +0000 http://www.joetaxpayer.com/?p=2685#comment-19575 I faithfully paid down my debt with multiple extra principal payments each year for the last ten years, Joe. But last year I changed tack because I believe we will eventually be hit with high inflation - it is the only way I see how the government will be able to get out of this monstrous hole they are digging. Inflation is a friend to debtors - and a scourge to those of us with significant savings. With that in mind, I think it doesn't make much sense right now to pay off a $110,000 loan at 4.5% interest if inflation is going to make that the equivalent of peanuts in five years. So I am now taking my extra mortgage payments and temporarily holding them in a high interest savings accounts until I get a bit more clarity on the inflation situation. At the first sign of inflation that money is going toward real estate, gold or silver. If inflation doesn't pan out, then I'll put it toward the mortgage. Best, Len Len Penzo dot Com I faithfully paid down my debt with multiple extra principal payments each year for the last ten years, Joe. But last year I changed tack because I believe we will eventually be hit with high inflation – it is the only way I see how the government will be able to get out of this monstrous hole they are digging.

Inflation is a friend to debtors – and a scourge to those of us with significant savings.

With that in mind, I think it doesn’t make much sense right now to pay off a $110,000 loan at 4.5% interest if inflation is going to make that the equivalent of peanuts in five years.

So I am now taking my extra mortgage payments and temporarily holding them in a high interest savings accounts until I get a bit more clarity on the inflation situation. At the first sign of inflation that money is going toward real estate, gold or silver.

If inflation doesn’t pan out, then I’ll put it toward the mortgage.

Best,

Len
Len Penzo dot Com

]]> By: JOE http://www.joetaxpayer.com/30-year-mortgages/comment-page-1/#comment-19562 JOE Fri, 26 Mar 2010 17:00:26 +0000 http://www.joetaxpayer.com/?p=2685#comment-19562 Indeed, the 20 can be a nice compromise. One of my refinances was to go from the 30yr we had to a 20yr fixed. We had saved enough to make a large dent in principal, which when combined with the lower rate, meant the payment dropped as well. Two years later, as rates fell further, we moved from the 18 remaining to a 15yr which we have today. Indeed, the 20 can be a nice compromise. One of my refinances was to go from the 30yr we had to a 20yr fixed. We had saved enough to make a large dent in principal, which when combined with the lower rate, meant the payment dropped as well. Two years later, as rates fell further, we moved from the 18 remaining to a 15yr which we have today.

]]> By: Joe Plemon http://www.joetaxpayer.com/30-year-mortgages/comment-page-1/#comment-19555 Joe Plemon Fri, 26 Mar 2010 14:28:36 +0000 http://www.joetaxpayer.com/?p=2685#comment-19555 I appreciate this discussion because it forces us to get past the "One size fits all" mentality. I had been schooled in the Dave Ramsey mantra of ALWAYS get the 15 year mortgage, but even in advising my son on his home purchase I steered him toward a 30 year. Why? To give him and his wife some breathing room and more choices. After they bought their home, they became pregnant...my granddaughter is due in August!! Their finances will be tight, but they have the possibility of my daughter-in-law staying home with the baby. A 15 year loan would not have given them that option. Another quick thought/question: why do we limit our choices to a 15 year vs a 30 year? Why not a 10 year or maybe a 20 year mortgage? I appreciate this discussion because it forces us to get past the “One size fits all” mentality. I had been schooled in the Dave Ramsey mantra of ALWAYS get the 15 year mortgage, but even in advising my son on his home purchase I steered him toward a 30 year. Why? To give him and his wife some breathing room and more choices.

After they bought their home, they became pregnant…my granddaughter is due in August!! Their finances will be tight, but they have the possibility of my daughter-in-law staying home with the baby. A 15 year loan would not have given them that option.

Another quick thought/question: why do we limit our choices to a 15 year vs a 30 year? Why not a 10 year or maybe a 20 year mortgage?

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