I have been in business for myself for the past 10 years. It has not always been a bed of roses, I can tell you that. I now run an Internet business selling different products on my web site. http://www.lancenter.com In the financial aspect of living, I am a strict advocate of a 30 year mortgage. My friends all ask why? For these simple facts:

1.) Lower payment (the obvious)
2.) Turning the 15 year itch into a cash cow
3.) Investing the difference theory at it’s best

Everyone loves a lower payment. The argument is this: "I will pay less interest over the life of my loan". My answer: "Correct" End of story. Or is it the end? I explain my simple reasons, if they don’t get it, I move on. I won’t loose any sleep. But seriously, why don’t they get it? Here's why:

1.) It is not on paper,
2.) They don’t have it in front of their eyes,
3.) They can’t see for themselves what I am talking about.

Here it is on paper, in front of your eyes, and you can see for yourselves what I am talking about. As a bonus, you can send me an email and I will gladly send you a simple file in Excel, so you can do up your own figures.

The example I will use is a $100,000.00 mortgage, at 7% interest rate, and both 15, and 30 year terms. The payment for a 15 year mortgage in this example is $898.83. The payment for a 30 year mortgage is $665.30. The person who takes out a 15 year mortgage will get, after 15 years: a clear title and deed. Simply that. How would the same person like to walk away with thousands of dollars at the end of a 15 year payoff? Take a look at this.

Subtract the 30 year payment from the 15 year payment. I come up with $233.53. Now, let’s get smart and put that in the investment of your choice, every month, for 15 years. That same person paying the 15 year payment is putting out the exact same amount away to his mortgage payment:

$665.30 + $233.53 = $898.83

The funny thing is, at the end of the 15 year investment, figuring a modest 10% rate of return, the total will be approximately $96,789.51. What will the 30 year mortgage balance be? What if it’s $80,000.00? Pay it off, and put over $16,000.00 dollars in your pocket! What if the payoff is $85,000.00? Pay off the loan, and walk away with only a little over $11,000.00. Sound strange? It isn’t! It is a simple fact. The actual payoff is a little over $74,000.00. You can then pay the balance and put over $22,000.00 IN YOUR POCKET! This little known theory can be a major cash incentive to be used to your advantage!

This is the power of letting a little thing turn into a big payoff. Don’t get caught in the 15 year trap. Think it through, and do your homework. If you want the power of compound interest to work for you, give it a try. Take a lower payment, let the "Invest the difference" theory go to work for you and put some added cash in your pocket!

*Remember: Nothing is guaranteed, like rate of return on your investment. *To make this plan work, you have to invest!
*I will send you an Excel file to plug in your own figures. Let me know.