Short term or long term loans for just starting out

[Ethan McRae]

This is really basic stuff for most of you but I gotta ask...

For someone who is just starting out and is looking to buy their first property, should I be looking to essentially get financing with high monthly payments in order to pay off the property and build equity ASAP or low monthly payments to try to generate as much cash flow.

For instance, on an FHA loan, there seems to be a 15 year and 30 year option. Would the 15 year period with relatively lower interest but higher monthly payments be better for a new investor or a 30 year loan with lower payments but higher interest?

My gut tells me that for someone just starting out, the 30 year would be preferable. I think I would want to play it safe and try to get low monthly payments just in case worst comes to worst and I end up having to pay off the loan for a few months out of pocket at some point. Plus by trying to get as much cash flow as possible I can theoretically save up faster to buy the next property.

Is this thought process logical, or am I thinking about this the wrong way?

Many thanks

[Michele Wax]

I say that you should decide you long term goals first.

If you want to have positive cash flow and work only as an investor someday then you should go with the thirty, pay it off *** in making more than the monthly payments, then when you have say 30k available do a heloc....continue paying off the first at the regular payment and get the new one down asap....rinse and repeat

if you just want to own your own home and use it as an investment towards retirement then by all means get the 15 pay it off fast as you can and then relax.

I bought a house on a 15 year and paid it off in 9 years....now i have a home no matter what happens....

Let me know if you have any other questions....

Good Luck and tag me or pm me for anything you need.