[quote=Raybyrnes]Hopefully your kids end up on scholarship but the benefit of being house rich and saving poor works to your advantage when applying for finacial aid.
By committing to a 15 year schedule you also force yourself to pay down the loan. Easy to say you will do it when you are on a 30 year program, harder to do.
If you have equity in the home and are looking for a short term bridge why not take out an equity line. Right now you could find rate on those for 4% or less.
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I say we will pay down the 30yr loan faster than schedule because once we set up the auto payment plan (2 extra payments divided by 12 added to each months auto withdrawal) we didn’t change until we re-fied to 15 years (There might have been a few months were we stopped due to me being laid off and the wife not working). So in this case at least we do have a track record. By the way, we are not totally savings poor. I contribute $100/month/child for college, we have the Roth, I think I put in 10% or thereabouts for 401k. We do have enough in the bank to live for a year, maybe only on ramen noodles, and the wife manages her own “Pre-marriage” money
What is the schedule for equity lines? Let’s say I take out $10k, how soon do I have to pay it back? Unlike paying down the mortgage, we don’t have a track record with equity lines so I don’t know how we handle the temptation of that “piggy bank”. Where as a bank account balance forces you (at least me) to look at monthly spending. Plus can’t banks pull your equity line without notice as I have heard happen to people recently? I am not saying that an equity line is the wrong solution, but these are questions I have.
