50 Year Mortgage

[Bobby Bucks]

A 50 year mortgage is renting from the bank. The federal reserve is a Ponzi scheme.

 

[Non Sequitur]

A 50 year mortgage is renting from the bank. The federal reserve is a Ponzi scheme.

Yes. This is a reaction to the lock in effect we're suffering through due to nutty fed policy. And IMO this will just result in more of the same, borrowers will not have enough equity to move on for 20+ years.

 

[ucbruin]

Length of homeownership​

In 2024, the average length of U.S. homeownership is 11.9 years. While this number is nearly double the length of 6.5 years in 2006, home ownership has been on the decline since 2020

 

[Elliott]

50-year mortgage.....good example of 'diminishing returns'

Because of the new tax law, I'm looking at a HELOC, which is a 'interest only' loan for 10-years. The property has a First at 2.99%, that I don't want to lose, so the 'blended rate' will be 5%, which is better than any re-fi rate (with $10K of junk fees). Playing mortgage games is always fun. I've talked to many mortgage brokers and they always direct me to the 'worse' products.

 

[Non Sequitur]

Interesting take on the news:

 

[Joe Flacco]

I don't see it becoming the main mortgage option. It might work for some people situations. It would be competitive with ARM or interest only mortgage, but without the risk of balloon for rate adjustment.

 

[gregb]

It would be competitive with ARM or interest only mortgage, but without the risk of balloon for rate adjustment.

Would or should there be a prepayment penalty?

 

[Joe Flacco]

Would or should there be a prepayment penalty?

Probably not. The interest is front loaded anyway.

You don't really build equity by making the payments. It helps, but mainly equity is built by holding and the property appreciating.

Yes, you pay a lot over the life of the loan, but if you are a renter, you are paying for housing anyway. And your rent would be increasing over the 50 years while your mortgage payment remains fixed.

 

[TerryRohrer]

Whatever they do to make housing affordable, or giving tax incentive, it only raises the values. Within a short period, any savings is lost. And oh do the authorities who tax real estate, love the golden goose laying those eggs.
Pretty soon we will all be living in the company town.
Welcome to town usa. Walmart will be the company store. CU will be the chief appraiser and staff.

80 years ago, it was the coal company, now the gubmint. The end is near, I suspect.

Saint Peter don't you call me 'cause I can't go, I owe my soul to the company store!

 

[Mark K]

Yeah, 80 year old borrower should not get 30 year loans.

Maybe not...but the lenders cannot age discriminate.

OTOH, people with 500 credit scores shouldn't quality for a mortgage but they do every day.