Replies to post #71630 on Zeev's Turnips Patch-No Politics (ZEEV)

[Ken2]

[mortgage rates]

Leon,

Thanks for the input. Yes, getting a 30-year mortgage and paying the 15-year payments does leave additional flexibility, but a 15-year mortgage typically has a slightly lower interest rate (.5%?).

Actually, the loan that I am considering is an interest only loan at Prime. Now THAT is flexible! If I want, I can simply pay interest forever. I referred to it as a 15-year adjustable because I plan to pay it off in 10 to 15 years, and it is adjustable because the interest is equal to Prime. This is the ideal loan UNTIL interest rates start moving up. If they stay flat for 3 to 5 years, then I would be able to substantially pay down the mortgage so that even if I had to refi at a higher rate, the overall savings would be worth it. If Zeev is correct and rates move up sharply in two years or less, then I am probably better off just getting the cheapest fixed rate loan that I can get now.

Decisions would be a lot easier if I knew the future !!! :o/

Thanks - Ken

[Smart_Money]

I agree. If you can dicipline, a 30 year is more flex than a 15 year. You can get the fix 30 year and pay as if it's a 15 year mort to a interest bearing account. If the rates go up you can make money towards paying off early. 1/2 basis point for additional 15 years is worth it.