We purchased our new home in June of 2004. We originally got a 30-year mortgage at a 6% but with the loan rates going down we decided to refinance in November of 2009. We wanted a 15-year loan but with the same payments as with our old 30-year loan so how did we do it? We had to “borrow/refinance” $24K less so that our payments could be exactly the same as before. We now a 15 year loan at a 4.375% . We send an additional $400 a month and an additional $2K to $3K a year. If everything goes as planned, we should pay it off in 9 years! We can’t wait!!

However, the downside of this is that we are creatures of habit. Typically if things come up unexpected, rather than tighten our belt, we will go ahead and make the 30 year payment.

I still like the safety net you have with the 30 year mortgage, if you can just be disciplined enough to pay more.

Nice thread.

In the mean time, it makes sense for most people to create as much flexibility as possible in their budget. Buying a less expensive house is one way to do that, as is using a 30 year mortgage. Even in your case, buying a smaller house would have saved you more money, and using a 30 year mortgage would have given you the flexibility to scale back if necessary, even if you goal would be to pay off your home as quickly as possible.

In retrospect, I would have bought an even smaller, less expensive house with a 15 and done the same thing. Today I find it odd that with anything else we start small and build up (cars, jewelry, electronics, luxuries) but when it comes to a home we all have a tendency to buy as much or more than we can afford.