My advice to anyone taking out a mortgage.

Get a quote for both 15 and 30 year mortgage.

Buy a house you can AFFORD on the 15 year mortgage.

At these stupid low interest rates, take the 30 year loan and invest the difference between the 30 and 15 year in something safe.

Why?

If you get in a financial pinch
-Your expenses will be lower
-You can use the invested money to help cover expenses. Try getting a HELOC with no income.

But there is MORE!

You can probably pay your loan off faster!

Example

You take out a $200K loan

15 year pmt @ 3.25% is $1,405
30 year pmt @ 2.625% is $803

After 12.5 years of investing $602 per month at a modest 6% return you could pay off the mortgage free and clear!

But...

With the 30 year mortgage after 30 years of investing $602 per month at a 6% return you have a paid off house AND $552K in investments.

With the 15 year mortgage after 15 years you have a paid of house. If you invest $1,405 per month for the next 15 years at a 6% return you will have $304K in investments.

In both instances you have a paid off house, but with the 30 year you have an extra $248K in investments!

So don’t listen to Dave Ramsey or Suze Orman. Take out the 30 year, pretend it’s a 15 year and you will come our WAY ahead.