50 year mortgages

wwjdmsl · #1 (**permalink**) 06-01-2006, 03:28 PM

Now this is scary / sad- opinions/thoughts?

"50-year mortgage hits the market
Lenders have begun offering a half-century home loan as incentive in face of record-high home prices, rising interest rates, report says"

http://money.cnn.com/2006/05/10/news...gage/index.htm

shengmei · #2 (**permalink**) 06-01-2006, 03:40 PM

Well.....I thought about it. For places like Southern California it would be a necessity.

Also, it is still cheaper than renting. Personally I would choose any kind of unfair mortgage over renting any time. It is getting difficult to rent a place with five cats. I heard plenty of horror stories from people in Southern California in regardance of pets, apparently you have to pay $50 a month for each pet.

b4freedom · #3 (**permalink**) 06-02-2006, 12:50 PM

Another tool for the bankers to get more of your money.

katwoman · #4 (**permalink**) 06-02-2006, 01:07 PM

Did you read that article? This loan product is offered as an adjustable rate mortgage!

lillyb · #5 (**permalink**) 06-02-2006, 01:20 PM

I can't even play with numbers on my loan amortization program. It doesn't go over 30 years. I can't even fathom what kind of interest is paid over a 50 year, if someone actually paid it to term, yikes!

b4freedom · #6 (**permalink**) 06-02-2006, 01:41 PM

If someone borrowed $350,000 for 50 years at 6.5% they would pay $1,973.01/month. All together, they would pay $1,183,805.46. However, it's worse then that, because the rate is only fixed for 10 years. After that, the rates go up and so does their payment.

Ima saver · #7 (**permalink**) 06-02-2006, 02:56 PM

Glad I bought my first house a long time ago. Back then, the longest mortgage you could get was a 20 year mortgage.

lillyb · #8 (**permalink**) 06-02-2006, 05:28 PM

Quote:

Originally Posted by b4freedom

If someone borrowed $350,000 for 50 years at 6.5% they would pay $1,973.01/month. All together, they would pay $1,183,805.46. However, it's worse then that, because the rate is only fixed for 10 years. After that, the rates go up and so does their payment.

*faints dead away*

mbhunter · #9 (**permalink**) 06-02-2006, 08:04 PM

I feel that if someone needs (not wants) to take out a 50-year to buy a house, then they probably can't afford the house -- southern CA or not. If they need to take out a 50-year, interest-only loan, then they definitely can't afford the house. Yet another "creative financing" method for the lenders to rope someone in who probably can't cut the loan in the first place, pocket the origination fees, and sell it off to Fannie Mae. It's reckless.