Reply to If you don't have a 15 year mortgage, you're living beyond your means?

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Reply to "If you don't have a 15 year mortgage, you're living beyond your means?"

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[quote=Anonymous][quote=Anonymous]So, yeah, in this example a 30 year monthly payment is $1,975 while a 15 year monthly payment is $3,333. The owner with the 15 year is piling the extra $1,358 (and then some, since % of P+I on I is lower) into building greater home equity via illiquid savings. The owner with the 30 year? Hats off if their $1,358 per month is being invested another way with a greater return. In the majority of cases, it’s actually used to cover things like taxes, insurance, car payments, and groceries. We at least know for a [b]fact[/b] that any owner with a 15 year mortgage is committed to savings. [/quote]

This. We’re also squarely in the 15 year camp. We’re paying about $5K per month vs. $3K per month because we have a 15 year vs. a 30 year mortgage. It is a 100% investment into an appreciating asset (i.e., our house) and provides a nice balance from a diversification perspective. We’re still saving about $8K per month for retirement, $2K per month for college savings (2 kids), maxed out HSA, and another $1K per month in additional taxable brokerage investments. We don’t like having too much net worth tied to our home, but we need to strike a balance with our portfolio of stocks.

Plus, tons of people seem to forget that after 15 years, 100% of the monthly payment on a 15 year mortgage becomes available for alternative investment options. Meanwhile, those with a 30 year are still overpaying interest for another 15 years. Talk about dumb. [/quote]

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