30 Year Mortgage vs. 15 Year Mortgage

[Armando P.]

Hello Fellow BP member. I’m a licenced real eatate agent In NY, and new real estate investor. I have a question that might sound silly and easy to some, but as a newbie I want to make sure I do my homework and make the right decision. Im about to purchase a duplex in an area that has a very solid and stable rental market, but homes don’t seem to appreciate as fast as other markets. My question is on the type of mortgage I should take out. At a 30 year i’ll obviously have a lower monthly payment, but more cash flow. At a 15, I’ll have less cash flow but will pay the home down in 1/2 the time. Knowing the appreciation in the area isn’t going to happen quick , should I go for the 30 or 15? My goal is buy and hold, and eventuelly build my portfolIo. Thank you

[Andrew B.]

I suggest 30 year. Lower payment gives you more flexibility. If you decide to pay it down at the same rate as the 15 year, you end up in almost the same situation, but have the flexibility to make lower payments if you so decide.