I'm leaning toward the hybrid approach myself. A few things I've been mulling over:
- Shorter terms look great on paper, but life loves throwing curveballs (like your friend's transmission—ouch).
- Automating modest extra payments seems smart; disciplined without feeling suffocating.
- Keeping some cash handy for emergencies or unexpected expenses just feels safer to me.
Still crunching numbers, but flexibility definitely seems key here...
"Automating modest extra payments seems smart; disciplined without feeling suffocating."
Totally agree with this. I've refinanced a few properties myself, and honestly, flexibility has always been my best friend. Here's how I'd approach it step-by-step:
1. **Run the numbers**: Compare total interest paid over the life of the loan for both shorter terms and lower monthly payments. Sometimes the savings aren't as big as you'd think once you factor in opportunity costs.
2. **Hybrid strategy**: Exactly what you're leaning toward—taking a longer term but consistently making extra payments when you can. This gives you breathing room if something unexpected pops up (like that transmission nightmare...been there).
3. **Emergency fund first**: Before committing to extra payments, make sure your emergency fund is solid. Real estate investing taught me early on that cash reserves are crucial—tenants move out unexpectedly, roofs leak, furnaces break down at the worst possible time.
In my experience, having options beats locking yourself into a rigid payment schedule every time. Sounds like you're already on the right track with your thinking.
"Hybrid strategy: Exactly what you're leaning toward—taking a longer term but consistently making extra payments when you can."
This makes sense, but from what I've seen, most people start out strong with extra payments then slowly lose steam. Life happens, priorities shift, and suddenly those "modest" extra payments vanish. Curious, has anyone here actually stuck consistently to extra payments long-term, or do you find yourself slipping back to minimums eventually?
I've seen the same thing happen a lot—people start strong, then gradually ease off. Personally, I found automating extra payments helpful. Even a small, fixed amount each month can add up without feeling like a big sacrifice. Relying solely on manual extra payments seems riskier to me, since it's easy to skip when things get tight. Automation takes the emotion out of it and keeps things consistent.
Automating payments definitely makes sense, especially if you're worried about losing momentum. But I'd also suggest running the numbers carefully before committing to a shorter term refinance. I refinanced a few years back and opted for lower monthly payments, then automated extra principal payments on top of that. It gave me flexibility—if something unexpected came up, I could pause those extras without stress. Just another angle to consider... everyone's situation's a bit different.
