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Updated about 7 years ago, 10/01/2017

Account Closed
  • Federal Way, WA
36
Votes |
35
Posts

15- or 30-year mortgage term on primary residence?

Account Closed
  • Federal Way, WA
Posted

I'm in the market to buy a new house and am looking for some thoughts on the pros and cons of 15- or 30-year mortgages. 

My husband and I paid off our current home's mortgage in 2008, and it's been a great feeling to be completely debt-free. That really reduced our costs and allowed us to invest more in retirement accounts. However, we cannot live off of our retirement accounts today and we really need to diversify our income.

For that reason, we plan to take on a mortgage when we move and to use the proceeds from the sale of our home for real estate investing. While I'm okay with the idea of having a mortgage again, I'm struggling to choose between and 15- or 30-year term. 

My first instinct is to go for the 15-year mortgage because I can build equity more quickly and I would avoid being highly-leveraged on my personal residence. However, most real estate investors have to borrow money anyway, and there is no cheaper money that what you can borrow on your own home. A 30-year mortgage would free up more of today's dollars for investing...

I really need to figure this out before I find a house to make an offer on. : )

So what's your vote: 15- or 30-year, and why?

Is there another option I should be considering?

Thanks for you help!

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