Why don't we enjoy a 50 year fixed rate home mortgage to lower monthly payments and prevent more foreclosures?
Answers:
Because 30 yrs is long enough to take-home pay for a house. Why would anyone want to drag it out to 50? If you can't pay for it in 30 or smaller quantity, YOU CAN'T AFFORD IT!
amortization on a 50 year mortgage is pointless. You would just use interest only instead. If you cant afford the payments on a 30 year mortgage after maybe you need to look at a smaller home.
It's just been in the second few years that lenders began to offer 40 year mortgage. With the intact economic crisis, I'm sure any changes contained by that arena are on the back burner with most lenders. Source(s): Appraiser/Realtor
Go to a network site that allows you to amortize a loan. You will fine the difference between a 30 year mortgage and 40 year mortgage and 50 year mortgage are very small. It would not help anyone.
Some Lenders (Argent) did offer 50 yrs. mortgage, but they were sub-prime lenders and most of this guard are out of business. In fact at one ponit many years ago, a Lender use to set aside 100 yr. mortgage. We had a loan officer that came accross a client that have a 100 yr. mortgage.
There are some factor to consider here.
First, in today's world, who stays in one spot so long? On top of that, who requests to be paying a mortgage when you are retired? Many people today can't afford to live on their retirement and you want to add a mortgage money to that?
Second, with the way mortgages work, you the bulk of the interest up front. Lets filch an example:
Say you borrowed $300,000 for a home at 6% interest for 30 years. Your payment is around $1800.00 per month. You don't get 10% of the loan remunerated off until year 7. You get to to 20% of the loan compensated off in year 12. The total interest you compensate the bank over the whole lifetime of the loan is $347514.00.
If you pocket the same thing and do a 40 year mortgage your grant per month is $1650.00. You get to 10% paid bad in year 12. You get to 20% compensated off in year 19. The total interest you settle the bank is $492,307.20.
For a 50 year mortgage your payment per month is $1580.00. You achieve 10% of the loan paid off surrounded by year 18 and 20% of the loan paid off within year 27. The total interest paid to the bank is $647526.00
You can see that going longer is not the smarter entity to do. If you need to have a 40 or 50 year mortgage to afford your home afterwards you need to look at a cheaper home.
Why don't we allow the states to regulate this entire parasitic issue of home mortgage loan rights and responsibilities; why must a blanket policy be established, to cover every state everywhere, by the Federal Government??
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