There’s no way we could swing a 15-year at this point. If anything I can just do a 30-year and double my monthly payment later, right? Isn’t the biggest difference between 30-year and shorter terms the difference in interest on the loan?
Yeah, it is a stretch, but the payment isn’t double what a 30 year payment would be, but definitely more. Sometimes you may get a lower rate too, but overall a better option.
For example, if you got a 15 year with a 3.85 rate and a 30 year with a 4.0 rate, you would pay $1,464 vs. $955 and over the life of the loan, pay $63,590 vs. $143,739 in interest alone. Even in the first five years, you will be saving $5-6k in interest.
$500-600/month extra is a lot of money for us where we stand. We’re aiming at a house probably higher up than most people would in our situation since our income will change drastically after a few years, not to mention the potential for kids.