50-year Mortgages Hit The Market

[Robbie Michaels]

I blogged about this topic earlier this morning. In case you don't want to click on my sig and read my blurb, here's two articles I found.

50-year mortgage debuts in California (Bankrate.com)

50-year mortgage debuts in California (CNN Money)

[Midlodemocrat]

1. That is simply astonishing. 50 years?

My house will be paid off in 3 1/2. I can't imagine having that kind of a loan hanging over my head.

[Warpy]

10. No, a 30 year mortgage can be paid off within an average working

life span. A 50 year mortgage would have retirees making mortgage payments on their social security. This is clearly insane.

The push seems to be to open up housing to marginal home buyers who see ARMs and interest only balloon mortgages for the unacceptable risks they are. My guess is that the fortunate of these buyers would refinance down the road (if prices hold well enough and they have enough equity to qualify) to the more reasonable 15 or 30 year fixed mortgage.

I was reading somewhere recently that the extra 20 years of mortgage life would result in only a $30/month savings on a $100,000 mortgage at current rates. Although it would aid some people who are just on the qualifying line, it still looks like an unacceptable risk for no return to me.

[flamin lib]

2. It was only a matter of time. We are entering the world of never

ending mortgages. The mortgage will become the burden of the estate. The most common repository for building security, the homestead, is disappearing.

Like making minimum payments on revolving credit the appreciation in value and equity growth will no longer out pace inflation. Having a mortgage will become the same as renting, but with maintenance costs.

Why not a hundred year mortgage?

[Robbie Michaels]

3. Shhhh!

Don't give lenders in my part of the country any ideas. Actually, I wouldn't be surprised if they're already kicking that idea around.

[Inland]

4. Check out this month's Harpers on real estate. nt

[Robbie Michaels]

5. I read that on someone's blog

All I can do is shake my head. Condo conversions flooded the market where I live. Most of them are now selling for about 60-65% of their asking prices from last September.

[wakemeupwhenitsover]

6. I see so many problems with this.

Getting out from under a mortgage is about the only way most of us are going to be able to make it in retirement.

DH & I went for a 15 year & paid it off several years ago. We've got friends who refied to pay off credit card debt & are now back at 25 plus years before it's paid off. Between their mortgages & health care costs they have no idea how they'll ever retire & I don't either. Bad enough to have 20 years left on the loan & you're in your late forties, what if you've got 40 plus years & you're in your late 40s. And what if you're like most people & are in your late 20s, early 30s before you can even afford to buy. That would put you in late 70s, early 80's before it's paid off. And that's discounting any refies.

[Trillo]

7. Simple math:

buy a home when you're 22, own it free and clear when you're 72. If you win the lottery, you can pay it off early and maybe retire.

[Odin2005]

8. We're becoming the Roman Empire.

the average guy is permanently in debt to the people on top.

[anoraksia53]

9. worse still

with the longer time periods it's more likely some crisis will lead to repossession.

This looks like a plan for large-scale wealth transfer over the long term............Not Good.