15yr vs 30yr more cash now or later, your help please

15yr vs 30yr more cash now or later, your help please

Member since 2020 · 1 post · 0 votes

First post here and I appreciate your help in advance.

I have 7 four family buildings and one single family rental and I am in the process of refi with Fannie Mae and Freddie Mac.  In the next week or so I need to decide if I plan on putting them on a 30yr or 15yr mortgage.  I understand the difference in interest, payback time, and amount of $$ back in my pocket per month but I cant DECIDED......... I am loosing my mind. 

1. I refi to all 30yr at or around 3% save $1800 per month just in mortgage payments. 

*Its unlikly to lock in all this money at such a LOW % rate for 30 years, The extra $$ per month is a really nice bonus. 

2. Refi four buildings at 15yr and the rest at 30yr.  This would allow me to keep somewhat the same income (I would loose 300$ per month) but doing this would build more equity sooner than later.

My plan is to buy more properties and an owner next to a four family hinted he will sell off 5 multi unit buildings in the area I invest in in the next 2-5 years, Nothing offical.  As I type this the easy answer is half and half but missing out on that extra cash flow is hard to pass up.

Any suggestions from people in a Similar situation???

Thanks for your ideas/help

Jake

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  • Investor · Pensacola, FL · Member since 2015 · 26 posts · 1 vote
    5y

    30 gives more flexibility.

    Than can paying 15yr sched.

    go to Dinkytown.net for great calculators

  • Rental Property Investor · Member since 2020 · 215 posts · 137 votes
    5y

    @Jacob Nawrocki

    It depends on your financial situation.

    Do you need cash to cover for expenses monthly? If not i would go to 15 years. As you mentioned you will have more equity sooner. ( not many will echo my words, specially here in BP).

    After 1 year you will have 18 k and could ask your bank to recast, which is pay down principal keeping your same tenor. That will give you extra bucks per month ( installments will drop). In the second year you save a bit more... and on and on... eventually you pay it quickly ( if you dont have any more to invest).

    I would also try to calculate the impact on your taxes, trying to match enough income in order to minimize taxes.

  • Bob NortonPro Member
    Accountant · Slidell, LA · Member since 2019 · 382 posts · 272 votes
    5y

    @Jacob Nawrocki I recommend going with the 30yr mortgages.  You can always increase your principal payments to shorten the term on your loan.  You cannot reduce your mortgage payments if you need to pay less for some reason.

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