Equity build up rather than Cash Flow, why not?

[Francois D.]

Most investors favor CF rather than equity build up.

The advice is get a mortgage as long as you can (30+years) so you can have a few more hundred dollars in CF.

This neglects the fact that you pay more than three times the amount of interests on a 30 yr loan rather than 15 yr over their respective life.

On a 15 yr, you build up equity (=wealth) quite fast, which is a cushion in case something goes wrong.

Paying a 30 yr faster is not equivalent to a 15 as the portion of interest on your main payment will always be higher.

Investing for equity build up is not as 'flashy' as for CF since you need to live with slim to none CF.

However you actually build wealth faster, hence that is my decision.

I wanted to start this topic to see if others invest like me as we seam to be the minority.

[Brie Schmidt]

@Francois D. when I started investing I had the same opinion, but then my banker explained to me that with 30 year loans my DTI is lower and I can get approved for more in the future. So I take out 30 year loans, but pay them as they were 15 years.