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Hi /biz/
I'm trying to decide which kind of house loan is better for me, and I'm hoping for some advice
House is $285k
30 year fixed rate is quoting 3.537% APR
15 year fixed rate is quoting 2.850% APR
I'm putting up 30K as down payment
resulting in a monthly payment of
30y: $1,452
15y: $2,048
My debate is is it better to save that ~$600/mo and try to invest
or bite the bullet and try to pay as little interest as possible.
my total paid at the end of the loan math works out to
15y: $312,871
30y: $416,036
A little about me, right now I pay 1.9k a month on a rental and am saving $500/mo to help afford down payment, so the cost of either of these will be less than what I'm paying right now with rent+savings. I make 90k/year, and other than what I'm saving up for down payment I have pretty much nothing in savings other than my 401k
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>>1384528
Paying off loans is for suckers. Get a short term loan with a small interest rate, only pay the interest. Then after 10 years or do take out another loan and pay off the old loan. Repeat forever
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>>1384528
if you plan to move 3 times within the 30 years you will be better off to have just rented and invested in indexes (by historical returns)
you're a smart guy, but when I buy my house I'm going to attempt to pay my house off within 10 years. Not sure if I'm doing 15 or 30 year though.
just know if you do a 30 year mortgage and keep moving you're fucking yourself of gainz
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>>1384528
Open up an excel spreadsheet, and put in your mortgage payments/balance.
Now, calculate your net worth after 15 years if you took the 15-year mortgage.
Then, assume some interest rate for investments (say, 5-6% in some index fund), and assume you pay the 30-year rate, and dump the $600 difference into investments every month.
Compare your net worth under each plan after fifteen years. Pick the plan with the higher net worth (hint: it's the 30-year mortgage.)
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>>1384528
since you have around 10% down, does the loan have PMI or is it like an FHA loan that just has a higher interest rate?
if it has PMI, you can get rid of it quicker on the 15, since you will get to 20% equity faster.
what i did: get the 30 year, and pay a little extra to principal each month. then refinance when you get to 20% equity to get a lower rate/no PMI.
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>>1384528
>I'm trying to decide which kind of house loan is better for me
>which kind of house loan is better
>house loan
>house loan
>house loan
It's called a mortgage.
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