15 yr vs. 30 yr mortgage

[Kundan Chand]

I am refinancing $400k loan now to take advantage of lower rates on my primary residence. I have 2 options. 15 yr fixed @3.375 % vs. 30 yr. Fixed @3.875%. I am able to afford higher monthly payments for 15 yr fixed but most people I know are cautioning against 15 yr fixed since. It is higher payments. On quick calculation, I save $2k per yr. on average for next 3 yrs with 15 yr fixed. If I go for 30 yr, another option is to pay down extra principal every few months. I plan to stay in this hoise probably less than 5-7 yrs.

[Frank Wong]

Hi Kundan,

If you plan to stay less than 5-7yrs go with the 30yr.  What's the point of paying it down if you plan to sell?  Take the extra cash flow and have it stacked away an opportunity may arise where you may need it.