15 yr. or 30 yr. ? - Posted by rz

Posted by Dewey on November 19, 2000 at 23:16:18:

I recommend taking the thirty year loan as long as there is NOT a penalty for pre-payment. Once you have the 30 year loan, figure out the payment for a 15 year loan, and pay the loan back on the shorter 15 year schedule.

I follow this schedule myself. When everything is going great, I pay extra on the mortgage. When cash flow goes sour, at least I have not obligated myself to the higher payment. It may be the difference between a positive cash flow and a negative cash flow.

Good luck.


15 yr. or 30 yr. ? - Posted by rz

Posted by rz on November 18, 2000 at 06:27:45:

I’m trying to buy my first investment property. I’ll probably do a L/O when I find a buyer but may keep it as a long term rental. Currently conventional mortgage rates are around 7% or so on a 15 year loan in my area. The mortgage lender I spoke to mentioned how 30 yr. loans have a tax advantage over a 15 yr. loan. I wasn’t clear on what he meant. Wouldn’t I build up equity faster with a 15 yr. loan if my rent will cover expenses and stand to gain more later? Also he offered me rates that were 1.25 to 2.5% higher because it was investment property. Is this normal? Thanks much.

Do the 30 year - Posted by Paul Macdonald

Posted by Paul Macdonald on November 21, 2000 at 09:19:40:

If you are planning on holding the property and being an investor on other deals do a 30 year. Your qualifing income will show better.

Be careful how you ask your questions. About the extra costs for an investor loan Fannie/Freddie have surcharges for investment properties from 1.5 to 3.0 pts. based on LTV, credit scores, etc. If your broker is saying that your rate goes up either he/she is trying to pump you or they are using the premium pricing to cover the higher point charge they will get (or both). You didn’t give enough information to tell… bottom line, one way or the other Mr. Investor, a surcharge you will have.