Quote:
Originally Posted by PalmerGA
Yeah. That little extra principle really makes a difference. Regarding #1 though, crunching the numbers on a 15 year vs. 30 year mortgage is really quite an eye-opener. For instance:
$300,000 loan / 5% / 30 years = $1610 per month = $569,600 total ($269,600 in interest)
$300,000 loan / 5% / 15 years = $2372 per month = $426,960 total ($126,960 in interest)
That's $150,000 less interest paid over the life of the loan and a much quicker accumulation of equity while making payments.
Maybe it's just me, but I HATE paying interest!
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The difference in the monthly payments you are committing yourself to between a 15 and 30 year mortgage is significant, whereas you can accomplish the same thing by paying a little extra towards your principle each month - Upside, buffer in case you have an extra expense come up versus being committed to the higher monthly payment - downside, it takes some discipline to stick to the additional principle payments each month.