I heard that a 35 year amortization is a good thing, but I want to pay my mortgage off in 18 years like Ozzie suggests. Don’t I pay more interest on a 35 year amortization? Why would I go with a longer amortization?
The reason that the 35 year amortization has been a popular option (and strongly suggested by me in most cases) is that it gives you much more flexibility on your payments. The lower payments on your residence and your rental portfolio will help you a lot as the new rules regarding how much rental income lenders use can make it very difficult to qualify for a mortgage, especially if you are accelerating your payments. Many banks won’t finance your portfolio if you aren’t showing a 1.1 : 1 ratio of income to expenses for each property in your portfolio, and the 35 year amortization will help this. I can’t stress enough how many A+ clients have been recently running into qualification issues because they are paying down their mortgages aggressively.