30 yr or 20 year cash out refinance

[Cindy Whit]

Hi All!

My daughter and I are brand new to this group, and have a question on how to finance our (her) first property.  She is 18 and has chosen to start a construction/real estate business instead of going to college, and my husband and I want to give her money that we would have otherwise paid for her college, so that she can pay cash for her first property, and not have to worry about getting financing, etc.  We are planning to refinance our mortgage, and take cash out, to give her the money in a lump sum.  We currently have a 20 year mortgage.  My question is, should we refinance for 20 years @ 2.95% interest or 30 year at 3.25%.  Fees, etc would be the same.  I've always been taught to pay down debt, so choosing to finance for longer is foreign to me!  If I hold for 30 years I'll pay about $150,000 more in interest over the life of the loan so I just can't wrap my mind around that being a better option.

Thanks so much!!

Cindy and Grace