Here’s why I don’t recommend getting a 15 year mortgage vs a 30 year mortgage, and how taking out a longer term loan could leave you with WAY more money…enjoy! Add me on Snapchat/Instagram: GPStephan
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here’s where I’m getting at, summed up as simply put as possible..if you don’t watch anything in the video, at least read this:
First of all, there’s NOTHING stopping you from paying down a 30-year mortgage early if you want to. If you get a 30 year loan, you can pay it off whenever you want. If you decide you want to pay it off in 15 years, just increase your monthly payment and pay it off sooner.
What a 30 year loan gives you that a 15-year loan doesn’t is FLEXIBILITY. It gives you the ability, if you want to, to pay it off over 30 years and invest elsewhere…or you can pay it off in 5 years, it doesn’t matter. The advantage to doing this is that it gives you more safety and leeway with your payments.
Also, home equity isn’t really going to be making you money…as unpopular as that is to say, when you have your money tied up in a property, it’s not money that’s easily accessible to invest elsewhere at a higher return. In order to get that money, you either need to sell the property - or do a cash-out refinance, pulling out your money, but then taking out a brand new loan and starting all of this again.
With a 30 year loan, you’ll have access to your money as you need it because you’re paying LESS money into an illiquid investment like real estate, and like my last example, you’ll have more free cashflow available to you at the end of the month.
And arguably, the difference in loan amounts between 15 years and 30 years is really such a small number after you account for write offs and inflation…that you may as well just take the 30 year for additional flexibility, allowing you to re-invest the money at a higher return.
And let me just say this for all the Dave Ramsey followers who live by his advice of the 15 year mortgage:
The IDEAL scenario here is that if you’re getting a home for yourself to live in, buy something where you could afford the 15-year mortgage, but take a 30 year for additional flexibility. If you’re getting a house where you can ONLY afford a 30 year house payment, I’d argue that you should lower your price range.
For an investment property, always take the 30 year…cash flow is king, not equity, so you could always go with the option that gives you the greatest amount of write offs…which is the 30 year…and the most cash flow…which is also the 30 year.
For business inquiries or paid one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness @gmail.com
Suggested reading:
The Millionaire Real Estate Agent: http://goo.gl/TPTSVC
Your money or your life: https://goo.gl/fmlaJR
The Millionaire Real Estate Investor: https://goo.gl/sV9xtl
How to Win Friends and Influence People: https://goo.gl/1f3Meq
Think and grow rich: https://goo.gl/SSKlyu
Awaken the giant within: https://goo.gl/niIAEI
The Book on Rental Property Investing: https://goo.gl/qtJqFq
Favorite Credit Cards:
Chase Sapphire Reserve - https://goo.gl/sT68EC
American Express Platinum - https://goo.gl/C9n4e3
LIMITED TIME: Get 2 FREE STOCKS ON WEBULL when you deposit $100 (Valued up to $1850): https://act.webull.com/k/Vowbik9Tm5he/main
Join the private Real Estate Facebook Group:
https://www.facebook.com/groups/therealestatemillionairemastermind/
Get $50 off for a LIMITED TIME with code ThankYou50 - The Real Estate Agent Academy: Learn how to start and grow your career as a Real Estate Agent to a Six-Figure Income, how to best build your network of clients, expand into luxury markets, and the exact steps I’ve used to grow my business from $0 to over $125 million in sales: https://goo.gl/UFpi4c
here’s where I’m getting at, summed up as simply put as possible..if you don’t watch anything in the video, at least read this:
First of all, there’s NOTHING stopping you from paying down a 30-year mortgage early if you want to. If you get a 30 year loan, you can pay it off whenever you want. If you decide you want to pay it off in 15 years, just increase your monthly payment and pay it off sooner.
What a 30 year loan gives you that a 15-year loan doesn’t is FLEXIBILITY. It gives you the ability, if you want to, to pay it off over 30 years and invest elsewhere…or you can pay it off in 5 years, it doesn’t matter. The advantage to doing this is that it gives you more safety and leeway with your payments.
Also, home equity isn’t really going to be making you money…as unpopular as that is to say, when you have your money tied up in a property, it’s not money that’s easily accessible to invest elsewhere at a higher return. In order to get that money, you either need to sell the property - or do a cash-out refinance, pulling out your money, but then taking out a brand new loan and starting all of this again.
With a 30 year loan, you’ll have access to your money as you need it because you’re paying LESS money into an illiquid investment like real estate, and like my last example, you’ll have more free cashflow available to you at the end of the month.
And arguably, the difference in loan amounts between 15 years and 30 years is really such a small number after you account for write offs and inflation…that you may as well just take the 30 year for additional flexibility, allowing you to re-invest the money at a higher return.
And let me just say this for all the Dave Ramsey followers who live by his advice of the 15 year mortgage:
The IDEAL scenario here is that if you’re getting a home for yourself to live in, buy something where you could afford the 15-year mortgage, but take a 30 year for additional flexibility. If you’re getting a house where you can ONLY afford a 30 year house payment, I’d argue that you should lower your price range.
For an investment property, always take the 30 year…cash flow is king, not equity, so you could always go with the option that gives you the greatest amount of write offs…which is the 30 year…and the most cash flow…which is also the 30 year.
For business inquiries or paid one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness @gmail.com
Suggested reading:
The Millionaire Real Estate Agent: http://goo.gl/TPTSVC
Your money or your life: https://goo.gl/fmlaJR
The Millionaire Real Estate Investor: https://goo.gl/sV9xtl
How to Win Friends and Influence People: https://goo.gl/1f3Meq
Think and grow rich: https://goo.gl/SSKlyu
Awaken the giant within: https://goo.gl/niIAEI
The Book on Rental Property Investing: https://goo.gl/qtJqFq
Favorite Credit Cards:
Chase Sapphire Reserve - https://goo.gl/sT68EC
American Express Platinum - https://goo.gl/C9n4e3
A lot of it depends on where you want to put your risk.
invest = give random people to hold your money and if they go bankrupt you end up with nothing. There is never investment scenario when you lose your investment. Like it is impossible.
Because then "investors" will have to work instead of living off your money.
What a bs )))) 30 year mortgage is only profitable to the banks. Banks do not care so much about that you pay your principal in 30 y from now with devalued money. Most importantly is that you pay all that interest FIRST! So means in the very first years of your mortgage when inflation did not devalued your dollars yet. That's it. They could even forgive you that principal after 25 years who cares)))) they already squeezed you like the lemon. Just look at what is called amortization graph for 30 y vs 15 y mortgage. Guy is not stupid he is just paid by financial mafia.
The first 15 of the 30 years you're paying majority interest. So you don't even build equity until 15 years in… and inflation effects everything. If you have to fix a hvac then that's more expensive. And most people gonna end up refinancing the moment they see lower interest rates just to lower their monthly but they will just end up paying interest all over again and never build equity until they die.
Good advice if you live in a perfect world
This video is biaised because after 15 years mortgage it will be paid off so in this example you would have $300,000 to invest on top of the $2300 he is talking about. While on a 30 years mortgage after 15 years only about 30% will be refunded.
Does this video still apply when interest rates are higher like they currently are?
What’s the deal w the cars in the background.. never trust a guy that doesn’t drive a beat up Tacoma
The problem with this argument is that you have to actually make the effort and have the forethought to invest that money. The 15-YR mortgage is the easy button.
Good points
Is there an updated video, given today's inflation and higher interest rate?
Best video yet! Made so much sense.
Lets be real most people will do the 30 because its the only way to get a home. 15yr is only an option for a small population
who say's i am going to unsun…..
boats and hoes lol that was funny but ye s I agree with his logic on the 30 years
Clear as mud huh?
My wife showed me this video. We have invested zero dollars as adults and we are in our early 30's, my opinion is that it's really difficult to shape that behavior and teach yourself to start seriously investing. I have also read that there are penalties for paying off your 30 year loan early, is this true?
Get a 30 year mortgage to take out more debt.. yikes
Is that a green screen, if not why’d u choose to get a lotus what is ur opinion on that car and is it a standard?
Because you are an idiot . My daughter just took out a 10 year mortgage and will be mortgage free by the age of 36. I think that is good as she does not pay the bank 100,000 and saves all that money.
One question if i have an apartment and i need to take mortgage on it and from this mortgage to buy an apartment.
The policy of the bank they need a 20% of the mortgage value as liquidity ?
The thing is that people will opt for a higher priced home and won't have that extra money to invest. At the end, having money is about psychology and mindset.
this video hasnt aged well.
I'll take 30 since I'm rent is increasing anyways, 30 years fix rate is no big deal, I can put my extra income to dividends, stock, futures and options/currency trading.
Where should I invest the money?
You forget about one thing, most of people get salaries. Salaries don't quite catch-up to inflation. Debt IS NOT for poor people. We, poor people, need a giant down payment and pay it as fast as possible. Otherwise we're on the treadmill.