Quote:
Originally Posted by DJ's left nut
Maybe.
But let's say you have 100K that you could either put as a down payment to get yourself to a 15 year note or you could keep the liquidity and take the 30 yr note.
The 15 yr note is going to be about a point lower in interest - so point 15 yr. However, I can take that 100K and put it in the market. Over the 15 years that I'm 'saving', I will probably quadruple that in the market, considering a relatively steady historic return. Even with the market collapsing in/around '07, if you didn't need that money, it's recovered to the point that 100K invested in 2000 would be worth about 185K today if you did nothing more than shove it all into an S&P index fund. And that's with an absolute bed-shitting in the middle. Like I said, using historic average without a mid-term collapse and you're looking at it being worth about 400K.
And remember, the interest you pay on the notes is tax deductible, so your 4% note is going to figure more like 3% after the tax advantages (with the 3% note being at about 2.25%), so the gap on the % difference closes as well.
A 30 yr note really can be a very strong, sound financial decision if you're willing to take the liquidity that you save and use it to defray the added cost.
Ultimately I just like not having to give a shit about a budget. If I want to do something right now, I get to do it. If my monthly mortgage payment triples, sure I'll have a hell of a house...and it's a good thing because I'll be spending a lot more time sitting in it instead of going on vacations, going out to eat, etc...
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We just bought a new home a few months back. First house, tired of paying 1400 for rent, yada yada.
Went with a 30 year for basically what you're saying here. I pay my wife from my 2 offices to do "bookwork" and basically take that extra income and just throw it at either A. Debt or B. the market.
She does well enough herself that she shouldn't be getting paid, especially when I do the bookwork anyway but from a tax perspective I guess it makes sense, or so I was told.
In terms of the house though, we ended up going a little smaller but we love it and have extra income to do shit with. I'm not huge on the big house right now, maybe in the future I would be I guess, but give me all my other shit.
Of course a 3k per month student loan tab eats taht other shit up a little quicker than I'd like but it is what it is.