| TCESOX - 10/19/2018 9:41 AM
A couple of boats ago, I took a longer term loan to get the payment down, for flexibility. I paid double or triple the payment amount each month for about 18 to 20 months. I had a couple of months that I only made the minimum payment due to anticipated cash flow issues. Then I re-fied to a four year at a better interest rate, and ended up paying that off before it was due. Probably paid a small amount more in interest versus a shorter original loan, but it gave me the flexibility to make a much smaller payment on a few occasions, which, for me at the time, was worth what little difference there was in the long run. Many ways you can juggle things to fit your situation. Just have to get out the old abacus and amortization charts, and do some math.
This is a good way to do a loan decision. I saw home owners who would go with a shorter term mortgage to get lower rate, but that impacted their cash flow and if they had to lay out a chunk of money for an unexpected expense, like a furnace, it often ended up on a credit card where the interest rate was double digits. Everyone's situation and financial goals are different. Need to really think about it, what is the best way for you to go. |
