The 15 Year Mortgage

I just had a wonderful conversation with Mr. Woodpecker about why I wanted to get a 15 year mortgage instead of a 30 year.

See, 15 years seems like an imaginable time frame to me. I can imagine working at my job 15 years. I can see living in a house for 15 years. I can see being with the same person for 15 years. 15 years, well, it doesn’t seem undo-able.

30 years? That is just about my entire life. That seems unsurmountable. I can’t even imagine – I’d be 60 by the time that loan got paid off.

By taking a 30 year loan I feel like I would be resigning myself to also having house payments. Always.

15 years? I can imagine the day where I finally send in that last mortgage payment. The house is mine. And then? That ~$1,000/month that I was paying on my mortgage – it becomes MINE. I could go sell the house, take the money and use it as a FATTY down payment on a new $300,000 house. Giggity! I could save that money every month for 5 years and have a kick ass $60,000. Then use that money to pay for a  nice home in cash. Or I could take that $60,000 and put it as a down payment on a beautiful home in the mountains that I can spend my summers at! Or I could buy a vacation condo in Mexico that I can visit in the summers. Or I could just invest it all and make gobs of money to spend in retirement or for a kick ass car or whatever the heck I wanted.

I could do… so much… because then my money and interest rates… they’d be working FOR ME!

I can’t imagine NOT doing a 15 year mortgage. I can afford it. And the possibilities at the end of the 15 years? Well, they seem ENDLESS!

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8 Responses to The 15 Year Mortgage

  1. Anita says:

    I completely understand and agree with your plans. We had a 15 year mortgage and we paid extra now and then and made an annual lump sum almost each year and we finished the 15 year mortgage in 8 years. Tousands of interest dollars remained in our pocket. :-). Can you imagine by doing that and finishing the mortgage by the time you turn 40?

  2. Michelle says:

    We have a 30 year mortgage, but we will have our house paid off in around 4 years from now (so that would be around a 6-7 year mortgage technically). It’ll be great when it’s gone!

  3. Jerry says:

    I would love to do a 15 year mortgage but we can barely handle the payments now with insurance and taxes tacked onto it. I hope things pick up with work because it might lead us to try and switch. I’d love to pay off sooner than later.

  4. Leigh says:

    A 15 year mortgage definitely seems awesome to me, but you have to look at the total cost: mortgage payments, insurance, property taxes, and maintenance. They say that you on average spend 3% of the value of your house to maintain it each year, which would work out to about $375 per month on a $150,000 house.

    You save SO much interest with a 15 year mortgage than a 30 year though and your rate is often 0.5% or so lower!

  5. ND Chic says:

    I think that 15 year mortgages are realistic but only if you have enough room in your budget. Your property taxes and insurance will go up with time. There is only about a .5% difference in the rate between a 15 and 30 year mortgage right now.

  6. Why not take a 30 year mortgage and pay it off like a 15? ND is right, the spreads between them are small right now, and that gives you a cushion if you ever need it.

  7. Mercedes says:

    I see nothing wrong with a 15 year, but it locks you in to a higher payment every month. If you honestly can easily make that payment every month I say go for it, but for me the 30 made sense because I was more comfortable with the payment amount, and could still apply a substantial amount above and beyond that minimum payment towards my principal each month. I’ve already shaved a year off of my payment schedule by doing this. (I’ve been in the house for just under two years) But I like having the peace of mind that if something terrible comes up (job loss or serious illness) that I’m not locked into the higher payment of the 15 year and could drop my payments back to my 30 year payment amount if need be to sustain myself for a little while.

    just a thought! 🙂

  8. I was wondering the same thing The Lost Goat was, why not take a 25+ year mortgage but then just make additional payments so you pay it off in 15 years but if something were to come up you would be okay.

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