No. of Recommendations: 3
Hi Evan,

If I can afford the 15-yr FRM, is there any reason not to take it over the 30-yr?
Oh, heck yes! The costs of the heavier amortization, and the risks & costs of reliquidation, for starters.

Every dollar you are forced to more rapidly bury into your real estate equity is a dollar that cannot be employed in alternative, safer growth compounding accounts. Mortgage rates are so low, that outperforming them in equivalently safe and equivalently timeframed account strategies is extremely easy.

Every dollar you are forced to more rapidly bury into your real estate equity is a dollar that you would be required to re-qualify for, and pay another transaction round for, should you either need it for urgent reasons, or merely prefer to rebalance it out of your real estate accounts and into more advantaged accounts.

The nominal rate discount (especially if you get mortgage interest tax deductions) fails significantly against your alternative ouside growth options, and the costs you'd incur for liquidity (as well as the risks of even being ABLE to access if needed after paying into your real estate equity.)

Hope that opens the view a bit.
Dave Donhoff
Leverage Planner
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