Mortgage Loan

DO NOT Get a 15 Year Mortgage: Here's Why





Time to critique Dave Ramsey and his belief that home buyers should only get a 15 year mortgage. Every time the Subscribe and Like button gets smashed, I’ll put more time into making these videos.

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DO NOT Get a 15 Year Mortgage: Here’s Why

Is getting a 15 year or 30 year mortgage better? Is it riskier to have a 15 year mortgage or a 30 year mortgage?

I answer these questions in today’s video.

Dave Ramsey preaches that home buyers should only buy a home if they can afford a 15 year mortgage and the payments are less than one quarter of their take home pay.

I disagree completely…

Dave Ramsey tries to fit everyone into his box of extreme qualifications. Not only does this criteria not apply to most home buyers, but he also doesn’t consider all of the people buying a home that make a lot of money through their purchase and don’t follow his criteria.

Here are a couple scenarios where people purchase a property and make money:
Buying a multi family 2-4 unit apartment and living in one of the units
House hacking by buying a house with extra bedrooms and renting the rooms out
Buying a house that needs rehab work which leads to a lot of equity

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3 comments

  1. When you see big price cuts on houses for sale, "MAKE OFFER!", etc., then you know deflation is here.

    You will have a short window to buy income properties on sale, low cash price or *creative financing.
    *
    I suggest avoiding multifamily apartment buildings, condos, townhouses, mobile homes; stay with single family houses.

    Then rapid price inflation will make you look like a genius.

    If you bought enough discounted rental properties, then you can sell some of them to pay off the others and own them free and clear, even after paying capital gains tax.

    Reply
  2. Get a 30-year mortgage loan, fixed rate, interest-only with no prepayment penalty, due in 30 years.

    Then calculate the monthly amortizing payment for 10-year, 15-year, and 30-year, and choose the monthly payment depending on your current expenses.

    As your income grows, you can increase your monthly payment as affordable., and that increased amount is all principal.
    Aim for 10-year amortizing; you can drop down to 15-year, 30-year, or interest-only payments when necessary.

    Reply
  3. Agreed! 30yr mortgage is better. Just pay as if it's a 15yr. Simple

    Reply

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