Re: Help me settle this 20 yr fixed vs 30 yr fixed mortgage debate
I'm closing on a condo on Tuesday, so it's not a theoretical question. I was thinking a $170 difference in payment (the actual true difference in my specific case) isn't really a big deal when the advantage is outright ownership in 10 years less time, and accelerated gain in equity. Basically, I'm thinking that $170/month difference isn't gonna break me. If I were to get in a position where I couldn't make the 20 year payment, I wouldn't be able to make the 30 year payment either.
Tax deductions are present on the 20 year as well as the 30 year so they cancel each other out, or are close enough to ignore IMO. The big difference is the amortization of the 20 year loan vs. the 30 year loan. It's not as simple as beating the interest rate.
If my thinking is flawed please give me advice. My long term plan is to live at this place for 7-9 years and then keep it as a rental property (excellent location) afterwards.
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