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Hi new here have a ???????? LONG

Posted by grinch_gut (My Page) on
Fri, Feb 20, 04 at 19:35

DH is now our sole income...as I sold my business last year and retired....We lost our home to a fire a year and a half ago...and rebuilt...he did our new house on a 15 year mortage and out of his 2nd payck. it takes all but 200 dollars to live 2 weeks on...including groceries...etc....soo my ? is would it be better to go to 30 years lower our house payment..as basically now all we can deduct substancly (sp) wise is our mortage....and not be strapped as if a big expense came up we would not know what to do....say a sudden out of the blue something?? He is adamat about not going longer I am wanting to not be strapped...for money and pay extra when we can but have the extra if we need that month....he pays all the bills and is in control so it is not like I would go nuts and spend spend spend...what would you do????????? Stacy


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RE: Hi new here have a ???????? LONG

I would be more in your camp than his. Life is too short to keep yourself financially strapped for years at a time because you want to keep a 15 year mortgage and get the house paid off sooner. Rates are now low, so it'd be a good time to go for the 30 year mortgage, drop your payment, and have a little breathing space.

But I doubt you have much chance of changing his mind. This is largely a matter of differing values. While it's definitely financially beneficial to pay a house off sooner and reduce interest expense, there is also value in enjoying some of the scenery of life along the way. None of us know exactly what the future holds for us.


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RE: Hi new here have a ???????? LONG

Go for the 30, live a little-you can always add extra principal payments when/if your financial situation improves, you will have the tax deduction on the interest. I was in a very tight situation for sometime, not my own doing, I refinanced so that I could have a little breathing room, and as things improve, I add a little more principal payment every month. The flexibility is worth it, and I can eat right again, get my dog his medicine, and breathe.


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RE: Hi new here have a ???????? LONG

Thank you both...I am going to show this thread to my dh...he means well he does...but I don't think he is thinking about how tight it is now...and what is something happens to either after struggling to get by for 15 years..then we are ready for fun...and tradgey hits...we struggled for nothing....IMO....Thanks again...sTacy


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RE: Hi new here have a ???????? LONG

GG,
Go with the 30 amortized loan. Get that cash-flow in better shape.

Tell DH he can squeeze the rock all he wants and stuff the monthly savings into CDs or Bonds that he can cash in at year 15 to wipe out the mortgage. If he pays as much (or close) into his (semi)liquid savings instruments, he'll be pretty much able to accomplish the same thing without causing you both to live as paupers along the way.

Tell him this;
It is FAR SAFER AND MORE CONSERVATIVE to have CASH ON HAND, rather than real estate equity on hand.

Having CASH should only scare the irresponsible.
(It "should" but it doesn't... because hey! They're irresponsible! ;~)

Cheers,
Dave Donhoff
Just some mortgage guy ;~)


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RE: Hi new here have a ???????? LONG

A couple of things to consider. Refinancing will cost you. It may be able to be rolled into the mortgage, but it is still money you will have to pay, and if rolled into the mortgage, pay with interest.
If you decide to go with 30, have a very detailed plan on how much emergency money you need. Save that money, then try to go back to paying your mortgage like a 15 year mortgage, by making extra payments toward principal each month.
I understand your husband's feelings. I consider my mortgage to be a noose that I can't wait to cut. However, I have cash on hand in case of emergency/unemployment and I did take a 30 year mortgage, so just in case I have a financial downturn, I can stop paying the extra I pay to principal each month.
Good Luck!


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RE: Hi new here have a ???????? LONG

We have chronic health problems so we tend to live conservitavely. We chose a 30-year mortgage, but as long as we can afford to, we are putting a lot extra each month down against principle. This has the effect of turning it into a 15-20 year mortgage in the long run, and over the last 7 years, has made a big dent in our mortgage. And if something should happen to DH's health situation, we have a very affordable mortgage, and can simply stop putting so much extra down.

We refinanced with our credit union for almost nothing in closing costs. There are low-cost refi's out there. Just shop around.


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