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BE very very careful. There are a plethora of "creative" mortgages out there that have the potential to put you in the poorhouse. What do I recommend (as a former Real Estate Broker and a Financial Planner) is a conventional mortgage, preferably a 30 year with the option to pay extra on the principal whenever convenient. For example, you could pay as if it were a 15 year mtg but cut back if there were a family emergency. I am a firm believer in the less debt, the better. When looking at a mortage and its attendant inderest deduction on your income tax, without going into detail, just think of this: Being in the 25% tax bracket (just an easy figure to fool with), you get 25% of the interest back. If you had no mortgage, you would be paying 25% on the whole shebang and keeping 75%. Which is better? Keep in mind your FICO score has an effect on the rate you will be offered. Check it out.
I am sure some of you guys are far more sophisticated than I am, but the aim of my plan is to be mortgage free by the time retirement comes along. I am retired....No mortgage, no car payments, no outstanding credit card balances (paid 100% each and every month). Was it easy? No. Did it take sacrifice and time? You bet. Was it worth it? An unqualified "yes".
Then again, I am a lousy gambler and am always looking for the "sure bet". Translate that as ultra conservative.
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Bob S. former owner of a 1984 silver 944
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