15 Year VS 30 Year Mortgage & Why I Choose Neither

When buying a home one of the first decisions you make is either to go with a 15-year or a 30-year mortgage. It's important that you understand the pros and cons of each mortgage program and understand how they may align with your financial goals. Some people's financial goals are to get out of debt while others goals are simply to make as much money as possible. Choosing the right mortgage program when buying a home will have an impact on either of these goals.
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Malcolm Lawson
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[@denniswebken8411]

Take the 30 year loan and pay it off in 15, takes discipline but it means lower monthly payments in case of money troubles. It will take a lot of discipline. Good luck 👍

[@kwonsikpark9468]

Many flaws in the analysis. First of all, any earnings from investments are subject to taxation. Second, i suspect many who gets 30 year mortgages are the ones who cannot afford higher monthly payments. These may not have a capacity to use extra few hundred dollars for investments. Finally, most importantly, the average duration of home ownership is 5 to 7 years in the US. In other words, no one keeps their house until he/she pays off his/her mortgage. I can confidently tell you that your principal will barely go down when you sell the house after 5 years if you had a 30 mortgage.

[@WheelerRickRambles]

The Financial Advisor (FA) approach is this: TIME...is most important factor to any mortgage ... that is ... How long will you be in this loan? You may be in the home for 30 yrs yet it’s almost a guarantee you will NOT be in the loan. Averages are closer to 7 yrs. Clients would say to me ‘I don’t know exactly how long!’ No worries... how old are you two? We are 45 When did you start out on your own? At 18 Okay.... 45 - 18 = 27 yrs on your own! Approximately how many have you moved? Well.:. College... then work... got outta that crappy apartment to a better one... stayed with relatives to save... and now in this tiny rental... so... Six times! 27 / 6 = just short of every 5 yrs Ballpark... Every 5 yrs you moved! Well we are looking to settle down for the first time ... George is doing great at work! Hmmmm... What if George got a promotion but had to move to another state... 30% salary increase... would you move? Heck Yes! (...so many variables why people get out of loans...) NO ONE IS IN A LOAN for 30 yrs... 10 is high! Life becomes more important then the interest rate! 10 yrs from now are you going to turn down a job opportunity... a life opportunity... because you have a 3% rate on your mortgage? 99% sure it is NO! (...maybe turn it into a rental... which is a whole other conversation...) Rates are the teaser to get you in the door... Time in the loan.. is the subject never discussed ! They will show huge 30 yrs of interest totals... some huge amortization chart with massive numbers of which never will happen cuz you will not be in the loan long enough! (...makes it look scary and you must ‘lock’ in rate now... Boom! You’ve been closed!..) A great distraction when doing a refi... and the net cost is $6000 ... 30 yrs of interest makes that look small! Especially when it’s $1500 out of pocket today and $4500 on the back end... Emotionally it feels good ... financially it is not! Your brake-even will probably be close to 5 yrs and you would need additional 7 for total of 12 yrs in the loan... to truly get it to work for you! The outside kicker is the equity increase possibility (over 7 to 12 yrs) will make the loan feel less impactful, part of the game, etc... Loan officers & Banks love this cuz they generate tremendous fees! (...anyone notice I haven’t mention rate? They are irrelevant unless y’all get past year 8 or so... Back in 1975 rates were 9 % and higher.... They go up and they go down! Up and down is volatility! Volatility generates fees!... Your life’s purpose, 8 yrs from now, will be far more important then a 3% mortgage rate!...)

[@kevinandrade6928]

I can’t STAND debt. I rather push myself to get extra income if I see another business opportunity with a 15 year mortgage.

[@danielmares7358]

Thanks for your help, I’m using your 10 hacks to pay off our new vehicle purchase in 3 years verses 6. We will definitely be using the same method on our home when it’s finish being built. Thank again.

[@MalcolmLawsonREALTOR]

That's great, glad I could help!

[@nevadapatrick]

I really enjoy your channel and sincerity in your personality. Keep up the great work and I wish you all the best. Thank you for your service too.

[@vero0992]

Excellent. I now understand why some commenters have said, "Don't pay off your mortgage early, invest that money!". But I think for my personal goals I'd rather have a 30-year and pay it off sooner with extra principal payments in order to maintain the flexibility to invest in a rental once I learn enough. I don't just want money at the end of my life, I want to build equity faster and get more income coming in. Great video. Have any tips on getting started with rental properties?

[@MalcolmLawsonREALTOR]

honestly, I think the best way to buy your first rental is to buy it as your primary residence and then move out into a new home. This way you are keeping your primary residence interest rate which will be significantly cheaper than interest rates on a home which is just a rental property.

[@vero0992]

@@MalcolmLawsonREALTOR Thanks for that! That explains partially why my previous landlords bought the houses they were going to rent and then lived in them before renting them. Smart. Awesome.

[@oregonhomeswithmariahcrawford]

Love what you said about asking what you could have invested your money in instead of paying off that payment. Way better investments elsewhere in my opinion.

[@stevensmith4706]

Exactly and by the time you would have paid the mortgage off earlier you you may be able to purchase the home earlier anyway by selling some of your stocks.

[@voltecrules624]

Update: stock market is way down, crypto is crashing, inflation is said to be 8.6%, but is really closer to 15%.

[@RobertBeedle]

​@@voltecrules624update, everything is hitting new highs

[@ITILII]

Very good video, Malcolm.... except for that droning piano playing Muzak.....:-/

[@thaonguyen-sp7xf]

I learned a lot of the loan terms.

[@ilovetongmew]

if I'm sure I'm going to live in this property for less than 5 years and will sell it, which one is a better option. Is it 15 year option?

[@WheelerRickRambles]

If I’m a REALTOR... I want my client in a 30 yr payment cuz it will garner a large price home... I... as a REALTOR.. will generate more commission! A 15 yr payment affords a smaller home/loan amount... my commission is now less! Right?

[@sophieartmusic]

Lol- yeah if you want to work another 30 years then yes go with the 30 year. If you want the option of stability and early retirement, then 15 years goes by super fast!! People break their backs to pay for a roof over their heads! Time is worth more than all if that $$$ -wake up people. The time to live is now, not 30 years later... not when you’re 67 to retiree.

[@sanbetski]

your content is awesome. more power to you

[@MalcolmLawsonREALTOR]

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[@relentlessgrowth4149]

I understand why you'd want to start going into "pay down mode" to hit strong cashflow sooner... but when I think about the ROI of instead reinvesting my spare cash, I just couldn't do it. Maybe I'm too greedy - or I'm too young. Can we also agree that Ground Rent is horse manure?

[@MalcolmLawsonREALTOR]

I agree. For some people it makes sence to try to get out of debt completely, for others there are far better opportunities out there.

[@janezagarolla9460]

We can trust the economy anymore to choose the 30 the faster you pay your mortgage the better if you don't want the bank to take it back

[@sonyacurti]

Question: super torn! Current mortgage is 4% Paid 25 / 30 years Original bal. Appx 177,000 Balance due now 157,431 I would rather accelerate my mortgage payments than refinance 15 yr. @ 2.25% the thought of restarting my loan AND paying money to do that KILLS me. Am I crazy??? Please help 🙏

[@outofthebox5441]

Just recast the loan if you don't want to spend the money on the refi, anyhow, that 2.25% doesn't exist anymore. By recasting the loan you can pay it down faster, it will as well lower the monthly obligated payments but keep the terms on years the same.

[@daxc1972]

Take the thirty and use left over money to buy Gamestop.....trust me on this.

[@jeffpfitzer]

Great thumbnail!

[@MalcolmLawsonREALTOR]

Thanks Jeff, it took me creating 16 thumbnail variations before I came up with that one.

[@manuelesparza1081]

@@MalcolmLawsonREALTOR I have 6k in Roth URA. I have full funded emergency fun. Did all Baby steps. No car pmt no credit cards. My question is would it better too place Roth IRA funds 5k as princable and 1k in my emergency fund instead? What do u think? Thank you in advance

[@platapapi420]

Not too sure about the opportunity cost point. Because one would assume that you would reap the returns of those opportunity cost during the 15 years of payments you save yourself from not having payment. Especially since the returns expected on investment (instead of paying down your mortgage) is contingent on the fact that individuals use that extra money to invest, which rarely ever happens as we know.

[@wadeneiderer7043]

I’d love to work for you. 21 years old and willing to learn, located near Westminster Md. Thanks

[@MalcolmLawsonREALTOR]

Hey Wade, are you thinking about getting your real estate license?

[@wadeneiderer7043]

Malcolm Lawson - REALTOR yes I am! Been wanting to do it for a while now just waiting for the right opportunity to get my foot in the door.

[@MalcolmLawsonREALTOR]

@@wadeneiderer7043 Great man, shoot me an email at [e-mail] and I can talk to you more about being an agent.

[@Cwilly13ify]

If you were wanting to maximize monthly savings to capitalize on the stock market you would do neither. Renting is often cheaper considering all costs. If you want to be out of debt and experience financial independence, pay off the house.

[@nahomegirma3596]

Hello sir! Do you know Any area in Maryland outside Baltimore,where you can buy vacant land to build shipping container home with out much restrictions? Thanks 🙏.

[@emmanuelsepulveda2468]

opportunity cost websters defenition: bullshit; example: mom, i dont want to do my homework but i swear ill finish it before i go to bed..., thats opportunity cost

[@chimalu]

Nice video but flexibility is spelled wrong bro

[@emmanuelsepulveda2468]

opportunity cost my assssss

[@Juantobiasarango]

If you add inflation the return of 9% is not really a benefit because is worth less like you said about mortgage. And you end up paying twice or more the same house over 30 years. Not a good idea.

[@svalentina3075]

The whooshiing sounds every time there's a number on the screen are annoying and distracting. Sorry but after a minute I could not hear anything else