How do people do a 30year mortgage?

I'm debating between 1/3 to 1/2 down and getting a 30 year solely to keep the required payment non-material but I plan on paying twice the required P&I to finish it in 10 years.

I could not imagine buying a home with a 30 year loan where I need to make payments for 30 years and that payment is material enough where I cant just double it most of the time to end it quicker.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086826)

Interest rate is most of what you pay, so it matters a lot.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086832)

Its like $100 a month (comparing a 15 year vs a 30 year with payments scheduled to end it in 10-15years) for the added flexibility of basically "not paying some payments" sometimes (ie just making the normal 30 year payment)

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086843)

But most of those people already had 30 and then refinanced. lol @ all these americans just buying homes maxing out their finances for the next 30 years.

I guess inflation/pay raises will ease that burden in 10-15 years, but still, a decade of being locked in like that. id killself

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086912)

if i could get a treasury at 7%, id take out more loans for sure

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086844)

I literally have only worked a western job full time for a max of 3 years before wanting to quit and take a year off.

Plus, my current equities plus a home paid off in 10 years = more than enough to retire anyways.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086903)

but people who did a 7 or 10 year interest only loan when rates are low are now fucked when rates reset

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086831)

30-year allows people with low HHI to be homeowners

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086834)

so all these people pick 30 years cuz everyone is max striving their leverage?

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086849)

also fannie/freddie do not allow it so that basically means there is no market for it anyways legal or not

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086906)

Also, Normal Bros just spend literally all of their money except for whatever 3.875% 401k contribution they make.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086889)

2.5k sq feet for a family of 4-6 is plenty.

edit: I only love location. That is the 1 thing I pay a premium for and I am fine with it as that is a lifestyle and family thing.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086948)

interest rates will never dip below 4%

who cares if they go lower. why set yourself up to be maxed out and in a stressed position where you need to grind to pay for your mortgage for years and years?

i litterally want a 30 year so that i can work for 1 or 2 years, take a year off or 1-2 years part time if i want, and the payment is still no big deal. And if i am full time cuz I want to be, I can just double the payment or whatever to knock it out in 10 years instead of 30. Which means if I do that for even 3 years, with 40% down, basically I can refinance in just 3 years for a new 30 year loan and the payment is basically nothing (P&I only).

How do Americans so easily position themself to be forced to grind.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50088929)

lol @ networth maxing as a way to live life. As someone who has never worked more than 3 years in a row without taking at least 6 months off, I just cant wrap my brain around it

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50088974)

30 year means you pay less each month. 15 year means you pay a lot more each month. The advantage of the 15 year is that you pay less overall interest and build up equity faster. The advantage of 30 years is that it's easier on the wallet and often allows you a nicer house.

I have a 30 year mortgage and didn't think twice about it. These are why:

1. More money to direct to investments in the market to grow faster. Which it has.

2. Over a 30 year period you will see significant housing appreciation so your equity grows for free regardless of how much of the mortgage you're paying down. Between 1996 and 2026, the US average house price rose by 200% on average nationwide. Note that between 1966 and 1996, the average house price rose by 550-600% (which is something I didn't know till just now but it does add perspective to the current housing market).

People with a 30 year mortgage often find that after about 7 or so years, they're sitting pretty, with a monthly mortgage declining in real value while their incomes have increased, and housing and equity gains also going up, so the urgency to pay it off isn't there unless you're a nerd. And especially paying off the mortgage doesn't mean you're off the hock. Taxes and insurance still have to be paid and for the typical homeowner that was probably a third of the overall mortgage payment.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086919)

It seems people leverage as much as they can and then dont really impact that leverage for a decade in order to chase a bit more returns in the market.

But this is also why so Americans need to work for healthcare, which is just another LOL thing I will never understand.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086927)

I've known no shortage of people in HCOL who maxed out their 30 year mortgages budget to get into a decent house in a decent district and just about all of them had the five or so years of money being tight then as incomes went up and inflation went up while payments remained static, they've come out ahead and are doing well.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086944)

Ya but they were also forced to work that entire period. What if they wanted to take 6 months or a year off to enjoy life? I couldnt imagine not having that flexibility just to get a bigger home.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50086952)

I guess the fact that the US hasnt had a recession since 2007 has helped.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50088606)

Think of it this way - most banks and sophisticated investment firms purchase real estate on loans with higher interest rates and huge balloon payments (the loans are 10 years but amoritzation is often 30 years).

Why wouldn't you do the same thing that Blackstone is doing with its real estate portfolio, especially if you're getting 2% lower rates than they are...

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50087904)

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50088611)

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50088902)

Yes, it amortizes worse than a 15 year mortgage, but people with families will make that trade off to buy a more expensive house so they can be in a better neighborhood.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50088696)

Im more bewildered why so many people want that.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50088908)

Against the grain, and with my trademark iconoclastic irreverence and intuitive grasp of The Truth, I dismissed my interlocutors and forged ahead with my signature. Now I have a 3% rate, a PITI that is sub-20% of my income, and a generously overvalued Zestimate that allows me to boast of an additional $200k in Equity growth since the fateful purchase.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50088832)

ya 3% full makes sense and i understand that as i have said many times. so u are pointing out an example i am not talking about. ty

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50088905)

WA, CO, TX, TN, ID, and non Miami FL have some forced selling due to remote work ending and some of those markets have certainly got hammered, but no recession so its only in the remote work pockets. a recession i think would make those remote work pockets the norm

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50088984)

like every major fucking problem right now can be traced to covid hysteria, every single one

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50089098)

Some things are just American and only understood by Americans who have never been abroad

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50088985)

I was in the opposite of your position--wondering why anyone would do the 15--but from the perspective of a non-retard.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50089004)

its more about leveraging yourself to the max, rather than your rate. Limiting your financial flexibility in exchange for more home.

Americans dont even understand flexibility lol. I bet all you guys take like 2 weeks of vacation a year haha

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50089006)

The reality is you should welcome 2.9% debt and actively seek out more of it. If you don't understand that / yearn deeply for yelling "we're debt-free!!" into a phone receiver with your fat wife, then I'm not even going to judge; I get it. Just don't make threads mocking objectively superior financial choices.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50089032)

Its like you cant read or choose not to read.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50089043)

I even state in the OP that I WILL LIKELY GET A 30 YEAR. But whatever, again its the OP, it wasnt in the title.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50089355)

I am totally ok with the whole renting thing. Ive lived in 5 different countries. lol I cant buy 5 homes fag

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50089361)

I've been living in many countries enjoying life. Now at a point where it makes a bit more sense to be fixed and prices are down 10% already. If I buy soon. even if they go down more later, it doesnt really matter.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50089397)

Why can't you just admit that you were wrong? Instead you're still arrogantly saying you know better than all the people that made financially superior decisions?

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50089421)

The real question is whether you are optimizing for mathematical efficiency or optionality. The 30-year with aggressive paydown gives you a ceiling on your downside while keeping the door open to walk away. The 15-year is a commitment to staying in place. It assumes you know where you will live and what you will do for the next decade and a half. That is a bold assumption in an economy where job tenure is collapsing and geographic arbitrage is the single best wealth-building strategy.

The people who leveraged at 2.9% in 2021 were not wrong. They bought the cheapest long-duration fixed income instrument available and deployed the spread into equities. The people who are buying at 6.5% now are paying for that optionality at a much steeper price. The arbitrage window is closing, which is the point nobody wants to admit because they are emotionally committed to the house hunt.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50089474)

That is why in the OP, I said I will likely do the 30 year with aggressive paydowns.

I dont disagree with anything you said.

(https://xoxohth.com/thread.php?thread_id=5896238&forum_id=2#50089489)