While less than 10% of the mortgage industry offers 40-year mortgages, here's something to factor in: they often come in with a rate increase of 20-35 bps.Assume 35 bps.$300k mortgage at 7.25% (30-year): $2,046$300k mortgage at 7.6% (40-year): $1,996Technically, it lowers the monthly, but not by much once factoring in the rate adjustment.

They are mocking these up with interest only loans and factoring back in the tax deduction as if you qualified for the tax benefits of a real estate professional and factoring in the diminished first year property tax (since its not a full year).

I still need to do a deeper dive, but the ownership structure was one of the external factors that I was thinking about.  

You will also have to factor in the closing cost for the new loan.

Of course you have to factor in realtor and closing costs on top.

Heck, some people might even pay more for the 'cool factor' of living in a 'small home'....I'd give it a go since you're a veteran of this RE stuff.

The biggest factors, from what I can tell, are age and rebuild cost. 

@Dennis Bragg, how did you factor improvements and market appreciation into the buy-back price?

From my understanding, as long as you intend on doing a STR when you close, there are no rules against changing your strategy after closing, especially if you find that something else is more profitable.So in our case, the lender determined an STR would bring in ~$3500/month (with all of their conservative factors), but now that we operate it as a huge 3300 sqft Co-Living property, it actually brings in $7000/month.

The precise property forecast can vary depending on a lot of factors but the general demand is really what you should use the tool for to make your plans.