15 YEAR VS 30 YEAR MORTGAGE

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When comparing a 15 year vs 30 year mortgage it's important to understand all of the factors in making this decision. Whether you are able to afford a home using either of these home loans, it is important to understand the difference between a 15 year and 30 year mortgage. There are pros and cons to each.
In my humble opinion, I prefer the 15 year mortgage because I'd rather have the peace of mind of not owning anybody anything. However, the other side to that coin is that if you opt for the 30 year mortgage, you will have lower payments, which will allow you to invest more money over those 30 years...if you're disciplined enough to stick with it.
If you invest $676 every month (the difference in payment between a 15 and 30 year mortgage) you will amazed at the amount of money you will make in the market.
Keep reading below to see a summarized outline of the video:
15 Year Mortgage Pros
- Lower interest rate (typically .25% to 1% lower than a 30 year)
- Faster pay off time period
- Build equity faster
15 Year Mortgage Cons
- Higher Monthly Payment
30 Year Mortgage Pros
- Lower Payment (buy more house than you can afford)
- Able to invest the extra money per month
30 Year Mortgage Cons
- Slower pay off time period
- Slower equity build due to slow principal pay down
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Опубликовано:

15 сен 2024

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Комментарии : 704

@WhiteBoardFinance 6 лет назад

*QOTD: Would you choose the 15 year or 30 year mortgage after watching this video? Why? Answer below!* 👇👇

@nellakane2622 5 лет назад

A 30 year mortgage and use your strategy and pay it as a 15 year mortgage. U did Really great job at explaining the difference. Most people stop at one is higher payment.

@anythinggoes8866 5 лет назад

15 year is better due to the fact that after the term of a 30 year you pretty much helped the bank buy another house. Plus the principal isn’t paid down and interest in the principal is still higher.

@tomcat172002 5 лет назад

A 15 is better all around

@gbshaun 5 лет назад

Depends ! of course. My 30-year was at just 3.375% so we're considering it a nice low-interest (deductible) loan. I've made double that on it in the past 10 years. But this doesn't work for everyone.

@anythinggoes8866 5 лет назад

gbshaun yeah but you still pay more for it because of long term interest

@JoseRodriguez-wb9vb 4 года назад

Bought my house at 7.5 % on a 30 year loan in 2001 , two years later I refinanced at 5% on a 15 year , paid off house in Feb 2019 at age 41, that was a good day

@Bleek17Six 4 года назад

Smart man 🤙🤙🤙

@noy6184 4 года назад

How was your lifestyle while u did that

@JoseRodriguez-wb9vb 4 года назад

@@noy6184 good , luckily when I bought houses were decently priced , not like now , when I went to 15 year my payment was still under 1200 a month , with prices today it would be harder

@noy6184 4 года назад

@@JoseRodriguez-wb9vb wow that is so awesome, i am glad it work out well for u, i know how it feels wake up with no debt, now you can invest on rental now

@JoseRodriguez-wb9vb 4 года назад

@@noy6184 working on that now , thinking of pulling cash out on this rent it and put money down on next , just figuring out if makes sense

@tedjackson5272 5 лет назад

I took out a 20 year mortgage 18 years ago. I can see the light at the end of the tunnel!

@LoneRanger-ik1qb 5 лет назад

congrats man!

@brianc9036 3 года назад

Awesome!!! Cool to hear, I just decided on a 20 year. 15 year was a little too aggressive for me as a single income person. At 33 would rather be done it at 53 opposed to 63!

@americandreamer828 3 года назад

I first saved 30% down payment for my first home before investing thoroughly in Stocks, ETFs and other financial commodities which enabled me pay fully for 3 houses in less than 2 years. Endeavor to work smart

@jennifernicoles6006 3 года назад

Great way for you to achieve your aim, how do you invest in stocks and is that just the secret, I would like if you can help me out too.

@contentmarketinginstitute7666 3 года назад

Can I learn?

@americandreamer828 3 года назад

Growth is important but I inevitably didn’t do it myself but with the guide of my trade analyst Eddy Bruke I’ve achieved this feat. Look him up on his page Eddybruke .info

@patiencemartez907 3 года назад

Does he have any direct way to reach him

@americandreamer828 3 года назад

Sure he does +32 (460) 219701 for a chat with him

@kchal0 5 лет назад

great video, I just purchased a house with 20% down on a 15 year fixed at a 2.99% rate. Something about making payments for 30 years I just didn't like. But the large principle payments are what really sold me on it.

@yardleyhbk 4 года назад

God bless you brother ! Smart move

@Vera-dg3hf 4 года назад

Amazing!!!!! Now multiply your property taxes by how many years you will live in your home. A house paid off = zero mortgage payments PLUS property taxes ($8000 depending where you live could be more or less) x (let’s say you live in it for 30 years)= $240,000.00 that means you pay double and triple for your “home.” I know the feeling

@gabelincoln3608 Год назад

@@Vera-dg3hf Yeha but the dollars are worth way less

@briantoth4702 5 лет назад

Good video! I just paid off my entire 30-year mortgage in five years and, you’re right, it feels great. You should note, too, that in states with homestead laws, creditors can’t go after your primary residence-another (hopefully unnecessary) valuable benefit of paying off your mortgage early.

@csmilinich 3 года назад

You make good income in order to pay it off that quick? That’s crazy fast...just curious what methods you used to get it done. Congrats!

@petulahclarke9082 7 месяцев назад

God blessed you. To pay off a mortgage in 5 years is a blessing

@melissarecord7102 3 года назад

We got a 30 year for our first house but are paying like it's a 15. We did that for the life flexibility. It's almost paid off and we are now renting it out so we will get a nice bump in money soon.

@consumerdebtchitchat 4 года назад

I have a 15 yr condo mortgage. Have made 5 months of payment and I'm in year 7 of amortization chart. Knocked out thousands in interest. Estimated time to pay off entire debt is 4 years. Buying 2.5 times LESS than I could afford really helped.

@rlopez2626 4 года назад

I just Refi my house at 2.5% for 15 years! I plan to pay it off in 10 years. Add more to the principal payment.

@miked412 3 года назад

Would prefer a 15 year and have paid off early. But, have a 30 and hoping to cash in on investing - will see how it goes.

@jamesharris4695 3 года назад

Bought my first house at 26 this week with a 30 year mortgage. This info was good to know

@NipkowDisk 5 лет назад

Back in 2001 when I bought my house I opted for a 15-year mortgage at 5-7/8% interest which was great at the time. One factor in my favor is that I was able to sell some property I had and used the proceeds for a healthy down payment. Paid it off in 2008 when I realized that I was within striking distance because of some inheritance money I had. Needless to say, the bank didn't make a huge amount of money on me. I wasn't in a hurry to jump into a house and put myself in danger of not being able to afford a roof over my head in a worst case scenario; rather, one could say I let things fall into place over time. So if I were to give any advice, it would be to *be patient* and plan your purchase carefully.

@darlescharwin5307 2 года назад

As someone currently who is looking for a home I never considered the investment over 30 idea. My plan was just to get the 15 originally. This is great advice.

@rianajansevanrensburg2444 3 года назад

Thank you for your financial advice. I have just turned 60 and thank goodness could afford to pay for our house in cash five years ago. I just love your smile and your way of teaching. Wish I had you for my math teacher. We live I South Africa

@zlatigol9 6 лет назад

I never thought about mortgage like this before. Obviously the math makes sense to reinvest the difference every month, but you're right about the peace of mind aspect. Great video as always my man!

@WhiteBoardFinance 6 лет назад

Thanks for watching and subscribing!!

@neilharbott8394 5 лет назад

And once you've paid off the home in 15 years - you can invest the entire "difference", won't end up with quite as much as the 30yr invest the difference, but only by about 90%. Your average borrow probably wouldn't invest the difference anyway. While the 15yr borrower might just... because he's been investing it for the 15 years into his home, he's not going to "miss" that amount once the home is paid off, so it'll be more easy to invest. Once I'd paid off my home it was much easier to justify routing that payment into investments, than it was to find extra to invest while paying down the mortgage.

@johnfortes2171 5 лет назад

I've always used a 30 yr. mortgage and paid in 15 or less by making PRINCIPAL ONLY payments- also when I got a raise I would add the extra income to theP.O. payment it's nice to have that "cushion" for emergencies!

@csmilinich 3 года назад

How much different was the total cost when you payed like that? Was it the exact same total amount as if you did a 15yr or still come out a bit more expensive?

@johnfortes2171 3 года назад

@@csmilinich That would depend on how much is paid on the P.O. each time- the more you pay ahead the more you save. You will pay more interest on a 30 UNLESS you make the P.O. payments. But since your monthly payment is less you have " CUSHION" built in -so if you have an emergency you can not pay the extra payment and use that money for the emergency!

@MoneyandLifeTV 6 лет назад

Wow 30 year mortgages are used 86% of the time? That is crazy. We actually went with the 30 year option so we have a more flexible payment, but we are on track to pay off our house around 10 years. We could pay it off now, but if the market does drop we want to use the cash to purchase another property. Great overview!

@WhiteBoardFinance 6 лет назад

That's awesome, being mortgage free is the way to go even though the math doesn't always shake out.

@aaronh2778 6 лет назад

Uh. Yeah, why pay it off now?. Wow clueless lol

@somchai9033 4 года назад

15 year mortgage is idiotic

@eli6322 6 лет назад

Great video! I'm still renting now, but looking to buy / get a loan for a house soon. The difference between the 15Y and 30Y mortgage monthly pay rates can be invested as you correctly point out. But remind that after 15Y you can invest the total amount of 2108 dollars completely during 15 more years. I've done the maths and it gets you around 700k as well. Considering the difference between the total cost of mortgage between the two, it pretty much levels out

@FR-rx8wy 4 года назад

Good point Marko, but i chose the shorter year in paying my mortgage, i made sure that most of my salary will go to the mortgage and have little to none to spend. Having no extra money made me frugal and innovative so I forced myself to generate a few passive income.

@AxelQC 5 лет назад

If you live in a rapidly appreciating market like Denver, Austin, most of the Northeast and West Coast, etc., you are better off buying your ideal home ASAP while you can still afford it. By the time you save up enough to pay a 15 year mortgage, your ideal home may have appreciated out of your price range. Moving is very expensive if you own a home. You could lose up to 10% of your home price selling and buying due to transaction costs. On a $400k home, that's nearly $40k. You'd be better off buying the bigger home with the 30 year mortgage than buying the smaller home at 15 years and then moving up when your family grows.

@WhiteBoardFinance 5 лет назад

Agreed

@tomcat172002 5 лет назад

Marko your numbers are wrong. You can only invest the 676 dollars for 15 years. The person with the 15 year mortgage could put there entire payment into an investment in year 16 So in year 16 the person with a 15 year mortgage can invest $2018 dollars a year.

@Channel21Jaymz 5 лет назад

Great catch. I'm a numbers guy, pretty detail oriented too (btw, it's $2,108....see? ;) and I didn't catch that. Well done. I ran a calculator investing 2108 at 7% for 15 years and came up with $668,156.52. Conversely, if you invested that 676 for 15yrs, you're looking at a $203k gain, so you're better off i guess, but only if you don't have to pay tax on that 203k, but you will so it's a wash. Bonus, the 15 year has zero risk. But honestly who's going to do this anyway.....

@pjras9361 5 лет назад

@tomcat172002 If Im thinking this out correctly, you have two options; pay a $1,432 mortgage payment and invest $676/month for the next 30 years starting today, or you can wait 15 years until the mortgage is paid off then invest $2,108 for the next 15 years after that. The first plan will earn $819,904 while the second plan will earn $680,160

@vyal4297 5 лет назад

also the total amount of interest payments need to be inflation adjusted in order to be able to compare apples to apples.

@dejanjovicic3767 5 лет назад

And for the 30 year mortgage you will pay 515.520$ where in the 15 year mortgage you end up paying 379.440$ to the bank. So the shorter mortgage is 136.080$ less expensive. On the other hand your investments earn 819.904$ and 680.160$ respectively, or you make 139.744$ more with the long term loan. In the end the difference between the two is only 3.664$ in favor of 30 year mortgage. However the risk on the 30 year mortgage is also higher.

@alex2143 5 лет назад

Dejan Jovicic that’s already taken into account by comparing the monthly payments. You’re counting it double.

@TheGreatSatan_ 3 года назад

We have a 15-year loan and every 14 days we give $50 towards the principal. It adds up and knocks a few years off at the end

@DONALD1951 5 лет назад

The biggest reason someone gets the 30 year is because the monthly payment is much lower and that is the payment they can afford.

@moialder252 5 лет назад

yea exactly. super simple. no need to over analyze. if people can afford the 15 years its obvious. the interest paid over 30 years is nuts but people need a home and they can lower the standard of home to go to a house that they can do in 15 years but hate the neighborhood hate the house etc, or go with what they set on buying at, good neighborhood good house with 30 years, property value increases, still so does equity and they are happy.

@pogeybait2065 4 года назад

While they enjoy their $4.00 mocha latte everyday.

@krzzzy19 4 года назад

If you need to take a 30 year to afford a house, you can't afford it.

@Jay_88_ 3 года назад

@@krzzzy19 By that logic over 80% of America's wouldn't buy homes and banks want to sell homes so yeah

@HardcoreGamer101508 3 года назад

@@krzzzy19 Then you'll be wasting lots of money renting an apartment until you can afford a house in this current market with your logic? That is just not true.

@PHXGlock 5 лет назад

I bought my last house in 2012 and have a 15 year Mortgage. Im now 47 and want to own this property outright before I retire. Something else to consider is in the event of an economic down turn where homes lose value Person A has a $300000 home purchased 10 years ago with a 30 year loan person B has a $300000 home purchesed 10 years ago with a 15 year loan Both homes are now worth $280,000, Person B owns most of the Home and Person A has No Equity. Buy Less than you can afford and don't become house poor. You will be glad you did

@my3m 5 лет назад

My friend you forgot to add the difference in payment compounded over 7% yield that person A has.

@rathelmmc3194 4 года назад

Jon Campo, downturns occur during or due to recessions. Recessions are caused by people losing their jobs. In 08 person A didn’t have a house worth anything and they didn’t have stocks worth anything. Person B would be unequivocally better off. Now will we see another 08 style crash again within 50 years? Probably not, but you never know.

@orestdany 6 лет назад

I would chose the 30 year mortgage and invest the rest, and pay it off as a 15 year mortgage. Time value of money is important to me, so I’d rather have the cash in hand to use and create more wealth.

@WhiteBoardFinance 6 лет назад

I agree! Thanks for watching and subscribing!

@my3m 5 лет назад

Anyone can get more than 4% return with cash invested in SPY. Yea your paying $136,000 more in interest but the whole point of the video was the difference in payment invested over 15 years will yield more than that. You should be looking at net interest rate.

@Bestfriend-650 5 лет назад

@@my3m True but then again, if a person is already fairly old like I am 36 and frankly I am not comfortable in spending next 30 years paying off my house and retire with a mortgage. Yes, I would have mony to pay it off but all this time I would lose a piece of mind. Also ideally I would like to own the house by the time my kids are in college. Also what if someone dies? Pretty much game over at that point and 30 years a lot of time.

@alex2143 5 лет назад

Solid Snake “What if someone dies” That’s where term life insurance comes in.

@flavf2494 4 года назад

Solid Snake you’re not old !! 😊😊

@seniorreact9627 5 лет назад

Glad to say I’m here before you get to 100k. You’ll one day have millions of subscribers sir. Thank you

@WhiteBoardFinance 5 лет назад

Thank you that means a lot!

@justrusty 5 лет назад

I just turned 61. Bought a new house with a 30 year mortgage. If I'm lucky, I'll die long before the 30 years is up, and I didn't have to buy the whole house! In all seriousness, I took a 30 year, because it's a fixed expense. It won't go up (I took a fixed rate, obviously), and having such a small expense (about 7% of my income) seems to me to be no big deal when my investments are earning a lot more. I don't have to tie up a large part of net worth in a non-liquid asset.

@seankraker 4 года назад

No but your kids will lol

@ssttay4226 4 года назад

Sean kraker which they can always sell if they don’t want to deal with it

@stevethomas760 5 лет назад

In '95 I bought a very modest house and went with a 15 year loan. Later when I wanted to refinance for a lower interest rate I was unable to because I didn't owe enough. Got a home equity line of credit, cost $285, dropped my interest rate 1.25% .

@WhiteBoardFinance 5 лет назад

nice

@suboray 5 лет назад

Like your wisdom on taking out a 30 yr but paying it off like a 15 yr

@muggzo8976 5 лет назад

suboray i agree

@Bestfriend-650 5 лет назад

Thanks so much, this video really helped me. I love Dave but the issue is that I am living in NY area and a decent house in a good school district starts at 600k. So even with the monthly take-home pay of 10K, there is no way I can buy a house using dave's formula. I would rather buy a 20yr or 30-year loan and invest the rest and try to pay it off like 15-year term. And if I lose my job or something, atleast I am not worried about losing my home. The good thing is Dave has brainwashed me so much that I have become very disciplined in managing my budget and expenses so saving money & investing is not an issue for me. No debt whatsoever baby :)

@markorajcevic6260 6 лет назад

Extremely informative ! Great use of examples to show the differences, definitely helped me understand the advantages of both. I liked how you tied the benefits of them both together in the end really good stuff.

@WhiteBoardFinance 6 лет назад

Thank you for the kind words! I'm glad you enjoyed the video and thanks for watching!

@TheWhiskyExplorer 5 лет назад

Hey Marko, another great video! We went with a 5 year term due to circumstances, but this video has been an eye-opener for options going forward. I’m loving the channel and your ability to explain this to newbs like me!

@WhiteBoardFinance 5 лет назад

Thank you!

@MuditVerma 2 года назад

oo so 15 and 30 aren't the only options?

@MARTINADBA1980 4 года назад

I have lost my faith in our school system!!!! Thanks Marko.

@fazotakeiteasy 4 года назад

Marko... I like your videos, like your humor and how you break things down and give a clear and concise explanation.

@pimppimpping 4 года назад

this is the class that i was looking for in schools until infound out school is pretty bullshit in the real life catagory, im glad i found your channel

@salemdunning5954 4 года назад

Get a 30 and overpay every month unless there is an emrgency.

@TankAssTanner 4 года назад

Yup that is my plan. I want to make extra payments and pay off in 15-20, but I want the flexibility you get with a 30 year if funds are temporarily lower.

@ralphwilliams2396 4 года назад

Thats the plan

@NitinKatiyarCircle 4 года назад

In start you try to pay extra but after some months it get down to minimum amount payment because somethings always comes in way for which you need to save up some cash

@gqa9419 4 года назад

I came here to post the same thing! I'm doing that now with extra auto payments since my loan inception. It's always good to have a fall back in case your income falls short. This way no late charges and bad credit.

@salemdunning5954 4 года назад

Well, I have made a huge change. I agree with my original post, but I did just refi to a 15 after running numbers. With rates as they are, my payment went up 54 dollars switching to a 15. Overpaying can't quite catch up. Currently around 200 going into the home and overpaying 200 on a 30. Switching to a 15 it starts at 600 towards principal.

@donpias3447 4 года назад

Paying my 30yr off by converting my monthly payments into weekly payments. You're already budgeting X-amount per month just dividing it by 4, which over the course of my loan, saves me around 20k in interest and ends up cutting years off the term. Considering doing the same thing on a 15yr in the near future now that the rates have dropped dramatically recently.

@danabinaz3173 4 года назад

Incredible info once again. Wish I had this info 30 years ago!

@harrison5014 5 лет назад

Plan on buying my first house here soon at 24 years old. This video helped out alot! Thanks!

@WhiteBoardFinance 5 лет назад

My pleasure, good luck Harison!

@elisa.velazquez 3 года назад

This really helped me understand the difference! Thank you for making this process a little bit easier for me. 🤗

@vaibhavaggarwal5300 4 года назад

Marko, you demonstrated how being disciplined would help get to $829,511 by investing the difference. But you should also cover investing $2108 per month for 15 years assuming the person has taken 15 years loan. That would be a fair comparison.

@andrewmorton4204 3 года назад

After 15 yrs, the investment would be around 668k and with the 136k interest saved, you would be at 804k. You are basically paying $840 per yr ((829-804)/30) or $70 per month(840/12) to be debt free sooner. I'll pay that mental/stress tax anyday

@anniealexander9616 5 лет назад

Just paid off my 15 year mortgage in 10 years . I had some tough times during those 10 years. I went through a divorce , had some medical bills, and a sick kid who came home from the army. I definitely wouldn't have invested the extra money. The average person just invest in 401k at work. When I paid off my 1st home, my best friend got mad at me. People envy a debt free lifestyle.

@xTheJackofBladesx 4 года назад

Envy is the enemy tonlivivng a good and debt free lifestyle. I am glad to never have had the care to look like anyone else or make mywelfnlook better than I truly am My wife and I find ourselves evolving and changing to ensure we live a debt free lifestyle. We were a bit naive when we started our life together and learning about each other. However we are now on a wonderful track and plan to retire with 5 mil net worth if not more. Again it's not a dream it's a goal and a hard yet strong one at that.

@techsir8866 5 лет назад

Thank you for the input, never considered investing the difference for a payout.

@WhiteBoardFinance 5 лет назад

My pleasure thanks for watching

@connormcwilliams9161 4 года назад

Short mortgage if you’re gonna live in it. Long term mortgage if you’re using it as a rental

@robocop581 4 года назад

I have a 25 year mortgage at 10% down. Instead of 15 year mortgage, I used the extra cash to invest in rental properties. I now have several rental properties that can easily pay for my mortgage plus extra. Those properties are earning a net 5% to 9.5%. But if I was to purchase only one property for primary use, I would put 50% down at 25 year mortgage variable rate with no penalty to settle the remainder after five years. 50% down payment to me is the best interest payment compromise.

@joshuakuehn 4 года назад

>$375,000 for a house Cries in SF Bay Area

@jamesm.3967 3 года назад

Keep crying. I just paid 115 k for a nice 🏠. 😢 Now I can travel and enjoy life and come to bay area.

@freedominabudget 4 года назад

Great breakdown of the two differences between 15 and 30 year mortgage!

@marcoemerson993 3 года назад

Bought my first apartment at age 37 during the peak of the first Corona virus wave when most of the developed world was under lockdown...with cash and at about 10% lower than asking price.

@sambeaumont395 4 года назад

Always take the longest term available, increase your payments to what you can afford and create future flexibility. Taking a loan over a shorter period based on what you can afford is a massive risk to you.

@rboddsnends9623 4 года назад

I bought my house 30 year mortgage but paid it off in 17 years. That’s with 5 job layoffs (IT field).

@nenaddjukanovic951 6 лет назад

Very informative and straight to the point. Many people struggle with what plan best suites them and their lifestyle. Thanks for your help and go with the Yugo! 😉

@WhiteBoardFinance 6 лет назад

Haha the Yugo is good in the winter! Thanks for watching 😀

@catt3911 6 лет назад

Great video, you're the only one that has explained the investment concept. I've been saying this for years!!!!

@WhiteBoardFinance 6 лет назад

Thank you :))

@ateam388 4 года назад

I did a 30 year and refinanced after 7 years. I pay 100 dollars more a month for a 15 year mortgage, but we cut out 8 years of payments we would of wasted away to the bank. Now we only have 10 years to go!👍🏼 2.99% interest rate in San Diego!

@LouisJanYoung 5 лет назад

Great video... 15 year is the way to go, build equity faster and achieve the goal of living mortgage free much faster. Higher payment toward your home is a forced savings so you don't blow that money on stupid stuff.

@WhiteBoardFinance 5 лет назад

Thanks Louis :)

@nunya5084 4 года назад

I know this video is a couple years old, but still relevant, so thanks! I like the idea of a 30 yr note, but trying to make 15 year note payments whenever possible as long as there is no penalty for early payoff.

@maxin3231 5 лет назад

I would take a 30 years and pay it in 15yrs. In 30 years of life a lot of things could happen, I prefer to have the option of a low payment in case of an emergency, if I lost my job, an accident happen or etc.

@Baitcasterbass 5 лет назад

emergency fund gotta have one cant live life as "what if" gotta be prepared for it

@JoshMichael 4 года назад

I took a 5 year, house paid for in 4 more years. Screw 30 years, I could be dead.

@brianc9036 3 года назад

I took out a 20 year because 15 year was a little bit to aggressive and the 30 year didn't really hold me accountable. For my situation the 20 year was good middle ground.

@tedkapusta2136 4 года назад

Pretty good lesson. However, one big advantage of the 30 yr was left out. Should inflation push mortgage rates back up several percent, you can sit pretty for many extra years at the initial lower rate.

@jackstraw5527 3 года назад

Yeah but in the same case if you had a 15 and it was paid off... you can't any better than 0% interest!

@jojolai400 4 года назад

You missed out the inflation over time The purchasing power of a dollar will be different than the purchasing power in 30 years

@AK-ky3ou 5 лет назад

Personal finance, not one size fits all, that’s why it’s personal. 👍

@WhiteBoardFinance 5 лет назад

correct

@fmilan1 5 лет назад

I bought my house in the bottom of the market in 2012. It worths today 360,000 but I bought it for 225,000. I paid 25,000 down and took a 30y mortgage. Now, what I did was to pay the mortgage bi-weekly, which meant that I'm actually making 2 extra payments per year. On top of that, I pay 110% of the minimal per month. So, in the end I'm paying extra 3 payments per year. I think it's not going to be 15 years, but it's not going to be 30 years either, now I'm down to 160,000 of the original 200,000 which is about 3 years ahead of the schedule. As the principal goes down, the speed in which we pay off the loan increases, so I would think I still have around 10 year ahead of me.

@Dahmy12 5 лет назад

You are the smartest person i have ever seen the reason am saying that you are using easy english language so as to get every person even an immigrant person like me. Thnak you so much may God bless you

@WhiteBoardFinance 5 лет назад

Thank you sir

@Dahmy12 5 лет назад

Hi Marko. We would like to explain the Stock market a lot for your future videoes i know a lot of guys will need that subject. We need you to give us a lot informations like how to start and how to became a Mestaer and PHD when it comes the stock am sure you can start a hundred thousand of those vidoes in your financial education channel.

@Marketplacere 3 года назад

Great explanations! This was very insightful to learn as a first time buyer!

@ThePatriots1993 4 года назад

I own a Realestate Redevelopment company and have been renovating, flipping, and selling homes for a little over 2 years now; at the same time, I purchased my first home for a discounted price in an up and coming neighborhood. It cost me $242,000 with 6% down and I had the option of a 15 year at $2,208 and 4.2% interest or 30 year at $1,525 and 4.8%. I of course ended up taking the 15 year. At first it was a struggle and after getting laid off ran through my savings quickly. But after recuperating and only 2 years later I just got rid of PMI and received a lower insurance rate b/c of being a lower risk. Now I would be paying under 2k, instead of having to wait 8 years for that to happen with the 30 year. In addition, I opted to keep paying my original mortgage of $2,208 and will be mortgage free in only 9 more years! I can truly tell you that after making small inexpensive improvements on my home (Backsplash, accent wall, stone pillars, re paint, balcony from porch, better fixtures, closet to office for 5th room) over the course of two years and 6% inflation in my area my home is now worth nearly 300k, and I have over 6 figures in equity and peace of mind that I will fully own a nearly half a million dollar asset by the time I'm 35 years old as opposed to 55. Thats something that no S&P 500 return or investment can give you. Also, now with Covid 19 the stock market will slowly recuperate as to where real estate was hardly affected in my area too. What I'm trying to say is that after viewing and analyzing a few of these videos I can determine that Stephan certainly makes great points, Marko is a wealth of information, and Dave R. is great in his own way, but make an educated decision and the right one for YOU. Furthermore hear all angles and perspectives, but listen to your gut and circumstances ultimately. I hope this helps someone out there, and don't forget to be blessed and invest without stress.

@hughrobert6189 4 года назад

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@raghavnitie 5 лет назад

Your argument supporting 30 year mortgage and investing the difference has a MAJOR flaw. With a 15 year mortgage, you have the ENTIRE 2100+ to invest for a full 15 years (16-30 years), because you are out of debt after 15 years. This is not a simple whiteboard calculation!!

@Channel21Jaymz 5 лет назад

Great catch. I'm a numbers guy, pretty detail oriented too and I didn't catch that. Well done. I ran a calculator investing 2108 at 7% for 15 years and came up with $668,156.52. Conversely, if you invested that 676 for 15yrs, you're looking at a $203k gain, so you're better off i guess (b/c 7% is better than 4%), but only if you don't have to pay tax on that 203k, but you will so it's a wash. Bonus, the 15 year has zero risk. But honestly who's going to do this anyway.....

@raghavnitie 5 лет назад

@marko can you respond to my observation? Is it accurate?

@Rshen11 4 года назад

@@Channel21Jaymz of course you're going to have to pay tax on the investment

@madeirask8 3 года назад

What about a 20y, is there any benefit? Great video, great channel. Trying to buy my first house. Super scared.

@GeorgeGammon 5 лет назад

Unfortunately this video leaves out the effects of inflation. 30 year fixed rate debt doesn't exist in a free market. This loan only exists because it's subsidized by the taxpayer via fannie/freddie. Why? Banks would never make the loan if they had to hold the paper because it's almost guaranteed to lose money, which is a transfer of wealth from the lender (bank) to the borrower (home owner). 30 year fixed rate is always the way to go, especially when the US has 23 trillion in on balance sheet debt and the only realistic way out of a debt problem is default or default via inflation. See 1970's

@roadrailn 4 года назад

George Gammon agreed

@prilep5 4 года назад

One more thing to consider is chance of appreciation and how much would be expected inflation.

@relentlessgrowth4149 4 года назад

If you are going to be responsible with your money and invest the difference, the 30 year definitely works out to be superior. However, if you know yourself and that you WON'T end up investing the difference... then do the 15 year.

@stevebracero9327 6 лет назад

Really straight and to the point! Great content, easy to digest

@WhiteBoardFinance 6 лет назад

Steve Bracero thanks for watching I'm glad you liked it!

@cult2458 5 лет назад

If your flipping homes go for the 30 year mortgage to keep your monthly payments low. Build up the equity of the home and live in it or rent it out and sell when you've at least reached a 20% stake...Also if you go for the 3.5% FHA loans try to hit the 20% mark to knock off those PMI payments or don't even bother , unless your flipping homes quick and know what you're doing.

@Faluthe 5 лет назад

Great content, thank you!. I choose 15, hate being in debt.

@WhiteBoardFinance 5 лет назад

Agreed

@sumar786 4 года назад

Correct me if I'm wrong Marko but I think it's better to get the 30 yr since you can always pay more on the principle if you want but the best part is that you'll have the option to rent out your place and have some wiggle room for maintenance and give you some passive income. As always, thank you for your videos brother.

@mikeoehme4136 5 лет назад

Marko - "Buying a home is one of the biggest purchases you'll make in your lifetime" Rich guy - "hold my Gucci crystal & studded shield acetate sunglasses"

@WhiteBoardFinance 5 лет назад

lmao!

@alfredbanuelos7312 4 года назад

Flexibility comes at potentially having a debt for 30 years if you make a mistake. You should already have an emergency fund for those emergency situations on a 15 year and still have money left over to invest. Most people take 30 years because it allows them to buy a bigger home. There's too much temptation in a 30 year loan. You build equity way faster with a 15 year loan. NPR podcast on mortgages I listened to says you own 3 times more in 5 years with a 15 year than a 30 year. At the age of 25 you can pay it off by 40. Being debt free at 40 is where true flexibility to do anything you want with your money comes from.

@jessicasantos2383 4 года назад

That was very informative enjoyed thank you👍 definitely made me look at the way I’m making my mortgage payment from a totally different perspective👌

@alangebhardtsbauer9312 4 года назад

Carrying a low interest rate for a longer amount of time... while scary is often financially advantageous considering that you can invest at (often) twice that rate over a 30 year period.

@ywamdan408 3 года назад

the yugo!!! "that'll be good in the winter"😂

@ariannaluky2085 4 года назад

disagree 100% 15 year with lowest interest possible. faster to pay off while you still actively make money to pay off.

@XxChuyoxX 4 года назад

30 year and paying large amounts directly into the principal is just as effective. You drastically lower the length of the loan, as well the total amount of interest you pay the bank. All without having an obligated amount of your income going towards a mortgage each month. Of course not everyone (probably most) is disciplined enough to take this route.

@johnfusc7962 4 года назад

That's correct while having a 30 year gives you more money to invest, only a small percentage of people take advantage of it. Better 15 year with a low interest rate.

@ejcheck 5 лет назад

Very good presentation. If I might offer an addendum as I did on one of your other vids. The mortgage interest is still deductible under the new tax law. This skews the numbers further towards the 30yr. My opinion, anything under 4% I consider FREE money. I'm in a high bracket if I knock off 30% from the interest rate my real rate becomes 2.8%. If I can do 7-8% in the market this becomes a really easy decision. Real life. I'm 68. My wife and I bought property in the south between 2011 and 2014 as we started shifting to retirement. The areas we bought were at the bottom of their markets, and we had very motivated sellers, interest rates 3.5% for 30yrs. Actually, the 1st property was refi'd 2x to get to 3.5. At the same time, we were taking some profits out of a down stock market for the down payments. Total monthly for 2 very lovely homes $2850 in mortgage payments a month (not much higher than a 15yr mort). As you mentioned this is where the discipline comes into play, a strong stomach helps as well. At the same time we were buying these properties I was repositioning in the market. Our stock portfolio has risen 4x from the low, we are living off Divs and interest. BTW, both houses have risen in value nicely since purchase. I had people ask me "what about the refi fees?" What did I care, may payment dropped a couple of hundred $/month and any fees (which were minimal) were financed over 30yrs. I also can now generate extra income by selling lottery tickets on whether or not I'll live to see the mortgage paid off. 30yr mtg vs age 68 makes for an interesting bet. LOL

@stevenpierre-paul1144 5 лет назад

Love the breaking down of how it looks on paper, even with fake numbers

@timetopay5344 4 года назад

Took out a 30 year fixed 10 years ago...made extra payments religiously monthly toward principal...will have the House paid off in 4.8 years. To add, still invested fully in my retirement plan.

@RealHealthyGuidance 4 года назад

I took 25 yr in 2015. I've paid extra so no its 8 yr left. But I will get it paid off in 2023.

@susannahjones6410 6 лет назад

it would be interesting to see the stats on the net worth of those who take the 30 year as opposed to 15 yr. I'd bet the 15 yr would be substantially larger as personal finance is mostly behavior and not head knowledge.

@WhiteBoardFinance 6 лет назад

Very good point Susannah!

@mr.k.826 4 года назад

You need to take into account inflation... 30 years makes so much sense.

@WhiteBoardFinance 4 года назад

In this low interest rate environment it does

@joinjaimie 3 года назад

10 year mortgage here and paying additional principle each month. On track to pay off in 7.

@Calisoju1 4 года назад

30 year for sure, 1990 mortgage in San Diego of 1000 a month equivalent to 4000 a month right now

@gbshaun 5 лет назад

Nice video. I'm not sure it's correct though to look at $676 invested for 30 years as the missed opportunity of a 15-year mortgage. Instead it should be looked at over just a 15 year period. Compare that amount, after tax, to what is the outstanding principal balance on a 30-year. One option then is to take that invested pot and pay off the principle. If your investment was good then you should be ahead. Or you can continue with the low-interest loan (mortgage) with tax-deductible interest payments. Of course the Trump tax bill has affected this calculation as many in places like CA can no longer benefit from the entire interest deduction.

@JsChannel8 5 лет назад

gbshaun I think the math was down right but he did not account for the 15 year mortgage free living. That person could invest that 2100 monthly for 15 years into a return of even 5% and be much further ahead

@roadrailn 4 года назад

jason s they can invest it yes, but still would be behind on a 15 vs 30. But peace of mind seems wayyyyy more valuable to most people than a couple hundred thousand profit.

@johnjoe_247 4 года назад

Cool video but ...Even if i had the cash to pay off $ 375,000 house , i would not . I would always use the banks money( leverage ) especially with current low interest rates, and i would invest the rest, possibly get a few rental properties. A cushion for when life happens is called an emergency fund ..yes financial discipline in important ..It's taken me so long to learn that , but watching videos like yours has helped me stay focused .

@cihatecicek 4 года назад

If you can afford the installments get a 10 year loan ...after paying 50-60 months you can refinance for another 10 years and your installments fall in half.. It is not a catholic marriage with %2 on pricipal you can refinance whenever interest rates are to your favor.. I buy a house as much as possible under market price during recession in real estate ... I dont look at interest rates or years of mortgage.... I refinance later

@muhammadalkathir7842 7 месяцев назад

hey Marko i really like the vidoes you do i started off doing the 50/30/20 rule and the debt avalanch as well got my credit score up to excelent over 6 years and now have bought my first property. thanks for all the great advice that youve given over the years

@angelomartinez9039 5 лет назад

Most people would not invest the extra money from a 30y mortgage

@WhiteBoardFinance 5 лет назад

agreed

@hillie47 5 лет назад

Yes, it takes iron discipline. I have a 30y mortgage and put a lot of money earmarked as "extra house payment" into a savings account. That at least gives me access to liquidity, but now I've built up enough to be comfortable with part of it being in investments where I don't have direct access and that are subject to market fluctuations. But again, a side-savings or investment approach requires discipline which not everybody has..... probably better said: that very few have.

@sambeaumont395 4 года назад

hillie47 - side savings usually earn less than the same amount of money on a mortgage. Split your loan so that some is on a line of credit and save interest on the mortgage, but still redraw when you need it.

@alex2143 5 лет назад

Taking a 30 y mortgage with the intent of paying it off in 15 actually sounds like the worst of both worlds. You have the interest rate of a 30 y mortgage, which means your monthly payments are going to be even higher if you want to pay it off in 15. The best insurance against life happening is a fully funded well stocked emergency fund. If you have that in place, it’s not a problem to have these incidental expenses, and you can keep investing the difference between the two. Money that you put into your home is money you won’t get back until you sell the house.

@rathelmmc3194 4 года назад

I think you’re ignoring the human in all of this. It’s highly stressful to live off of savings. The point of taking the 30 and paying it off like a 15 is because it allows flexibility in cash flow. An 08 style crash probably won’t happen in our lifetime again, but I can tell you that I was financially scarred by it. Being debt free is more important to me than maybe earning a few extra dollars in the markets.

@panama2468 4 года назад

@@rathelmmc3194 oh man I think that crash is coming again

@rathelmmc3194 4 года назад

panama2468, maybe. 08 took till about 2012 till it started normalizing. Hopefully with this one, after the government allows businesses to reopen it bounces back to normal much faster.

@csmilinich 3 года назад

That’s not actually true if you make the extra payments on principal only. The interest is calculated monthly on the amount of principal remaining so buy paying that down faster you limit the amount of interest that is remaining. I do think in the end even if you paid off a 30yr at 15yrs it would still cost you like $30k more though because of those early payment being mainly interest.

@christiancastro8635 4 года назад

Good video. I would like to see a more detailed video on the process of buying a house.

@seanrobinsonjr4363 3 года назад

Question is: How can I invest to get a 7% return? Since I don't know, 15 years suits me

@SARDOG 4 года назад

Started the purchase process and we are doing a 15yr mortgage at 2.3% using my VA cert. Our payments will be $1100 a month. House will be paid off in 10 years. Always get the 15 fixed. You will be house poor if you get the 30yr. Getting the 30yr is like buying a car for 8 years! If you can't afford it don't do it.

@designthinkingwithgian 4 года назад

under-rated comment

@allenfilmore5725 4 года назад

You forgot to calculate how much some one with a 15 years mortgage will make once he stops paying $2100 towards a mortgage and puts it all in a 7% growth account for 15 years after he pays off the house.

@toughmonkey5414 4 года назад

good point ! I think is way better unless you can get more than 7%

@shawmeck9323 4 года назад

He kind of did. Look at it this way. If you start investing early on day one at 7% you will make more money in the end than if you invest your full payments at year 15. Yes, you are investing more money, but you are 15 whole years behind. You simply cannot catch up. Compound interest is very powerful factor. And on top of that, in case you are still not convinced, there is inflation. A dollar today has more purchasing power than a dollar tomorrow! But wait, I feel you still need more convincing lol Your mortgage payments are TAX DEDUCTABLE! That means you get to keep more money and invest it at the market rates. Those that can handle/manage debt can benefit the most.

@billschlafly4107 4 года назад

You forgot to calculate how much you will lose if you fund your growth account after a 10 year bull market. This may be a good time to reduce your risk and pay down debt rather than fuel the bubble. Inflation could push stocks even higher still but no one really knows. Be careful.

@fit4ya1975 4 года назад

Where on earth are you gettin a constant 7% interest?

@RickMyBalls 4 года назад

Some lenders put limits on what you can overpay so best of both worlds not always possible.

@georgesgsxr 5 лет назад

marko you need to have a video on paying down your mortgage for a 30 year. like extra principal per month or one time.

@ltx383 5 лет назад

George Davis yes I think that would of made the video that much more great. Good suggestion.

@USAhealthInsReform 5 лет назад

I like the 30 year, even if you have cash. The interest rate is still so, so low it is practically free money. However, overall prices have been pretty inflated as a result of this financing ability along with our economy still trucking along pretty well (for now anyway)

@roadrailn 4 года назад

USAhealthInsReform agreed, keep a couple years cash, invest the rest, and go for the low interest 30

@DONALD1951 5 лет назад

The only advantage of a 30 year mortgage is the payment is much lower so in the event you lose your income it will be easier to pay.