In response to:

Ten Reasons to Avoid a 30 Year Mortgage

David1334 Wrote: Apr 08, 2013 12:29 PM
The US is due for a round of significant inflation, if not hyperinflation, driven by the absurd level of government debt spending. This is going to make the payments on a fixed rate mortgage look like chump change, as it did in the early 1980s for mortgages written in the late 1970s. Moreover, fixed rates in the 4% range would be offset by a good portfolio of dividend stocks - which will grow over time, as opposed to a fixed mortgage. The money is better invested there. As long as the underlying value of the securing property is sound, the long range perspective would indicate borrowing as much of the house's purchase price as possible (though not overbuying a house to do it).

Fact:  A 30 year loan at 3.625% for $300,000 has a fixed payment of $1368.
        The 1st payment is made up of $906 interest (66%) and $462 principal (34%).


1.  It will take 10.5 years before the above equation will have $684 principal and
     $684 interest.  Compare that with a 20 year loan which has 50.4% interest
     and 49.6% principal as the makeup of the first payment.  It will only take 4 months
     to be equal.  The 15 and 10 year fixed loans are even better than that.


2.  If you do not get any benefit from the interest on...

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