Oh boysie! 50 year mortgages!!

http://news.yahoo.com/s/usatoday/20060510/bs_usatoday/needtokeephousepaymentslowtrya50yearmortgage

wo issues to keep in mind: A borrower with a 50-year mortgage builds equity very slowly. And because rates on the loans are adjustable, borrower's monthly payments could rise.

Still, the 50-year isn't considered as risky as an interest-only loan or a mortgage that lets borrowers pay even less than the interest.

With those loans, a borrower might not build any equity and could end up owing more than a home is worth - called negative amortization.

That's why Anthony Sanchez applied for the 50-year loan to refinance his California home. "I looked at a lot of different options," says Sanchez, 30. "I didn't want to be tempted with negative amortization."

Man, this is GREAT! I could potentially be screwed by a bank for the rest of my life, instead of the usual 20 or thirty years! Fanfuckingtastic!

Gosh, wonder if I could get a 30 year loan and get a new hummer too!

w/o the landlord having to pay for all the upkeep.

Oh well.. to each his/her own... it's just not something that makes a lot of sense for, or to, me.

and the only possible reason to go into hock beyond your life expectancy is a little more leverage if you expect to flip the house in the not so distant future. Not exactly a good reason, though.

It does reduce the payments, but that's not a reason-- just a trick to buy what you can't afford.

Oh, and when you die and your kids get a mortgage, not an estate...

and there would be LOTS of interest on a 50-year note.

since we've had enough "taxable income" (we're on Soc Sec) to bother filing so I must admit that I'm a bit rusty now.

I'd like to see a break down on how much money a person could save by claiming the interest. Does the "end justify the means" and wouldn't it vary depending on amount of mortgage, interest and a persons income level?

Wow--this economy is doing great! :silly:

but with tax advantages and property value increase, we have personally done ok.

I wonder how these fifty year jobs compare, all around, with back a few years when interest was double digit? I mean when the final cost of the loan is calculated.

And I wonder how low this fifty year loan can take your payment? If it is low enough you could put something on the principal, would have make a difference?

on a $400,000, 30-year loan at 5.875% your total interest payment is $451,760.

The total interest for the same loan spread out to 50 years would be $841,400.

("That's OK, dear, we'll make the $389K difference in the stock market during the extra ten years") :silly:

which is mind blowingly stupid

... Yippy, in 2050, I may own that 2003 Explorer outright... Woo Hoo....

But there, extended families continue to live in the same house.

it's still better than renting.

i would think that it would be fixed rate.
you'd have to be completely brain-dead to sign up for a 50-year ARM.

I mean, if you could handle the swings, maybe at the end of 50 years you would have averaged paying about 8% or something. Of course, if you could handle large variations in payments, why would you get a 50 year term...

I well remember back in those glorious:puke:Regan years when Ronnie didn't technically raise taxes; he simply gutted major tax deductions, like interest paid on credit cards, car loans and student loans; and changed the formula to greatly reduce the amount of medical costs which could be deducted. Given the trillion dollar deficit, we realistically know that there's going to be a whopping tax increase, and that getting rid of the mortgage interest deduction would yield a large chunk of change. If and when that happens, homeowners w/ mortgages are going to be in very deep distress.

Given the high cost of housing and the fact that wages are not increasing at the same rate, it may be the only option for some people. Most individuals are not going to live in their home for the entire period of their mortgage. This is something that my parents generation was more likely to do. In fact, it is probably no longer financially sound to stick around to pay a 30 year mortgage. You'll end up paying over double the amount that was the asking price on the house. I don't know that we will see real estate grow at that type of rate in the next 30 years. Of course, if you turn back the clock 30 years, those individuals are probably able to sell their homes today for well over what they paid to the bank over the course of the 30 year loan. In some locations, people who did this are reaping the benefits in a big way.

The fact of the matter is this: with the exception of the very few in our society, it is nearly impossible to maintain any standard of living without being in some sort of debt. Debt is what is currently keeping our economy going. We need easy to obtain mortgages and credit cards. Without debt supply levels would sky rocket (over time there would be an adjustment, mainly because workers would be laid off), prices would tumble but unemployment would escalate, so no one would be buying even at very low prices.

It is just the way it goes. The industrial revolution made (and continues to make) it possible to mass produce goods at a rate that exceeds individuals ability to stock pile cash, which is why things have to be bought on time.

Unless, of course, we want to go back to being an agrarian society. The skill set for that was lost a couple of generations ago. Think about the people you know...do you think they would be capable of growing a garden, canning food for a winter, raising livestock? And, I forgot to mention, be willing to do without?

I was a very close to my grandfather who grow up in the hills of West Virginia. He talked about how they would go months without seeing money. They subsisted completely on the barter system. He said it was a tough life and didn't really look back on it in a romantic way. And to the day he died, he had to have a garden because he was afraid everything was going to go to hell and he wanted to have something to eat when it did.