I went with a 15 year loan to get my house paid off. I talked my daughter into refinancing hers to a 15 year loan too.
“I went with a 15 year loan to get my house paid off.”
I took out a 30year fixed loan at 2.25%.
I pay the minimum every month, and put any extra money I have into other investments.
It’s like printing money.
Thats some of the worst humble bragging Ive ever seen attempted. Leave it to those damned kids.
A 15 year used to get you lower interest as well. I always went 15 year as well. If I had cash come in I would pay some down which would reduce the term. I would have preferred to reduce the payment. I always believed the more disposable income the better. A down side of reducing the term is that you have less interest deductions since most of your payment is for principle.
With a 50 year mortgage you could probably pay $200 and reduce the term to 49. It would be preferable to buy a slightly smaller house, make the same payment, and get a 30 year loan.
The way we do it in our family (my wife and me, and each of our two daughters and their husbands), is invest the extra instead of paying extra on principal. That investment is in a separate investment fund (one for each family) earmarked in our minds as for home equity. One daughter will use it to pay off her mortgage (faster than she would have if she had paid extra on principal.
The other daughter is doing like my wife and me: when the investment balance equals the mortgage balance we'll count the house as "paid off" and make future mortgage payments from the mutual funds in the investment account. If there's ever a dispute between us and the bank, we withdraw the money from investments and pay off the mortgage (so the borrower won't be slave to the lender). But if we always have good relations with the bank we'll keep the money invested (so it keeps gaining more than the interest of the mortgage). Either way, the normal part of our budget feels like the house is paid off.