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I heard that a 35 year amortization is a good thing, but I want to pay my mortgage off in 18 years.

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.

About Kyle Green

Kyle Green has been working with Mortgage Alliance Meridian Mortgage Services as a mortgage broker specializing in investment real estate for the past 4 years. Because of the volume of his franchise which has been ranked #6, #5 and most recently #4 in 2009 in CMP magazine in volume he has top status level with all of the lenders and can guarantee the best rates on the market. Kyle works closely with Ozzie Jurock’s REAG membership to specialize in financing for investors by creating a plan that has built many successful real estate portfolio’s. He has spoken in front of groups of investors as small as 10 people to over 700 people, including Ozzie’s semi-annual Outlook Land Rush conferences which he has spoken at for the past 3 years. It is important to work with a mortgage broker who specializes in portfolio financing; just as you wouldn’t use a residential broker for a commercial purchase, you should use a specialist for your residential investments. If you have any questions about real estate investment financing, he can be reached at 778-373-5441 or

Comments ( 2 )

  1. Hi i was looking to buy a property near a university and rent it out to students. I current live in a duplex beside the university and rent 4 rooms out. Houses pop up all the time but when i crunch the numbers a 25 year mortgage just isnt comfortable enough. A 35 year gives me that comfort zone im looking for but im not sure if im going to have to pay more money in taxes on that income at the end of the year. I currently make around 96000 a year working in a trade. I have a $428,000 house 6000 property tax
    25 year mortgage on it. i pay about 2000 a month plus 500 property tax on the house. The rental income is about $1,540 against the 2000.

  2. Hi Jay,

    Taxes are more difficult to answer but remember that the interest is tax deductable. So, on a shorter amortization the tax deductable portion will shrink. Ideally, you should have a 35 year amortization on all rentals until your residence is paid off, might as well pay down what isn’t tax deductable before paying down the one that is. That said, speak with your accountant to confirm what really is best for you.

    Given the cashflow, I can say that being in negative cashflow on paper as you currently are will hinder your ability to qualify for future purchases. By extending the amortization to 35 years, you could shave a few hundred dollars off the payments and have more available credit for the next deal. Remember you can lump sum 15 – 20% per year on the mortgage with most lenders. I often advise to investors to make regular lump sums, with a 35 year amortization to help qualify them.

    In conclusion, unless there is a good reason from the accountant not to extend the amortization it will likely be the better option for you. You might not notice it now, but you might when you apply for your next investment purchase.

    Hope this information helps!

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