As always I like to use this blog as a tool. Today I am not going to give you genius financial wisdom, I am just going to give you my experience thus far in the mortgage arena.
It has been 24 hours since I put a contract on my first house. I have called three different loan officers to get good faith estimates thus far. The lowest I have seen is 4.5% for a 15-year and 4.75% for a 30 year.
Just to let you in on the Kakaras Family discussion…we want to pay off our house in LESS than 15 years. Seriously, we want this thing GONE. Mortgages are not fun, there are fees, applications, meetings, and as always the unexpected. So the Kakaras family made a decision, we don’t want to mess with mortgages anymore.
You might be thinking, “Ha, easier said than done.” You know what, you are right, it is easier to say it then do it, but not that much easier. With a 30 year we were looking at around a $700 payment/month. With a 15 year we were looking at around a $1,000 payment/month. Not really that huge of a difference, seriously these are numbers from a “real life” situation.
Honestly though, just because I like to cover bases, the Kakaras family may end up going on a 30 year but paying the $1,000/month as though we are paying it off within 15 years. This way if a major negative financial event occurs we can still pay $700 (I’m not being pessimistic, just prepared).
With the rate change from 4.5% to 4.75% (from going to a 30 year loan from a 15 year loan) we’d have to make a payment of an extra $15 dollars a month to keep up with the 15 year pay-off plan. Which doesn’t sound like a lot but over the life of the 15 year loan it would be an extra $2,700. This might still be worth it to have the flexibility of what I mentioned in the previous paragraph.
Anyway, those are the numbers that are rolling around in my head. As always, I want to share with you my thought process to my decisions.
