By Admin on Jul 15, 2009 in Personal Finance
Henry N asked:
Compare 15 and 30 year mortgages. Use the following information:
Compare 15 and 30 year mortgages. Use the following information:
Mortgage amount $250,000.
Marginal Tax rate 25%
15 year rate 5.5%
30 year rate 6.0%.
Find the difference between:
Monthly payments,
Total payments, and
Total interest.
You would save A LOT. I’m not sure of the calculations but I’d bet its arond $20-30K.
If you can afford a 15 year mortgage it is always better to go with the shorter term. But if you’re worried about losing a job or not being able to pay take the 30 year and make double payments on it. I think the stat is that if you make double payments on a 30 year mortgage you can pay it off in 7 years.
Joe L | Jul 16, 2009 | Reply
You can request a 15 year and a 30 year amortization that will give you complete break down between interest/principal. Even if you go 30 years and you get an open end mortgage, you can pay extra each month in order to cut down on the interest.
stan c | Jul 17, 2009 | Reply