40 year mortgage

[RLLD 4,154]

Rink

hey kids, anyone want to venture a guess at what happens to affordability if you use an implement if your mortgage?

[posty 2,620]

Can people really be this stupid?

"Forty-year mortgage stretches out that payment over a longer period of time, so it makes for a lower payment, which is what a lot of buyers need right now," Gonzalez said.

[Mike Honcho 5,145]

2 minutes ago, posty said:

Can people really be this stupid?

"Forty-year mortgage stretches out that payment over a longer period of time, so it makes for a lower payment, which is what a lot of buyers need right now," Gonzalez said.

I know right...I just refinanced for a 50 year mortgage, those people are suckers!

[MTSkiBum 1,620]

My cousin lived in Switzerland for a few years and I actually visited him when we were there on our honeymoon. He said everyone there had 100 year mortgage.

Personally I am on the record here as stating home ownership is overrated. West Virginia is one of the poorest states in the country and yet it has one of the highest home ownership. Renting allows people to move where the jobs are.

 

https://www.thelocal.ch/20201002/eight-reasons-why-buying-a-swiss-home-is-easier-than-you-think-hyppo-ch-tlccu

Quote

2. Long-term loans

In some countries, a mortgage is considered a millstone and a loan lasting 25 or 30 years can seem like forever. But in Switzerland, it’s common for mortgages to last 50 to 100 years. 

Yes, your mortgage could easily outlive you. Spreading the costs over such a period helps keep monthly repayments lower. You might even pass the mortgage on to your kids, which is not unusual for the Swiss. 

[Alias Detective 1,390]

I think a longer mortgage is a great thing allowing more homeowners.  There is a country song, "Dirt" or something like that....I believe having a homestead to raise a family has a lot of merit. 

 

With the advancement of medical technology people are working longer and can afford a longer mortgage.  I love the idea - And, imagine a 40 year note at 2%!

AND

The mortgagee can always refinance if they took a 40 year note at a rate that is too high.  That is if they stay in the same abode that long.

[RLLD 4,154]

OK, here is what happens...

First, you enhance affordability for people who have the credit to secure that mortgage.  But what is actually happening is people who were not in the market.....enter the market....and that is called deeeemmannnnddddd.... Ok kids, anyone know what happens when demand rises?

[Alias Detective 1,390]

3 minutes ago, RLLD said:

OK, here is what happens...

First, you enhance affordability for people who have the credit to secure that mortgage.  But what is actually happening is people who were not in the market.....enter the market....and that is called deeeemmannnnddddd.... Ok kids, anyone know what happens when demand rises?

Don't be a dlck like you are giving us a lesson.

[RLLD 4,154]

22 minutes ago, Alias Detective said:

Don't be a dlck like you are giving us a lesson.

Sorry.....

[Alias Detective 1,390]

2 minutes ago, RLLD said:

Sorry.....

[Cloaca du jour 2,147]

6 months left...amen!!  

Just prepping it for my golden years...brought washer and dryer up to spare br, just need to change tub to walk in shower.

No reason to sell...all 1 floor with full basement.  

[paulinstl 296]

There are some circumstances where a 40-year loan can be really beneficial. There are very few examples, but it can be the exact loan for the right case.

[Strike 5,271]

If everyone would just sell their homes for what they are "worth", i.e. 50% less than market value per RLLD, this wouldn't be an issue.

[Alias Detective 1,390]

Clearly, leveraging money is a bad move to some of you.  

[TimHauck 2,633]

10 minutes ago, Strike said:

If everyone would just sell their homes for what they are "worth", i.e. 50% less than market value per RLLD, this wouldn't be an issue.

Ok this one was actually funny, good job 

[thegeneral 2,992]

5 hours ago, Alias Detective said:

Don't be a dlck like you are giving us a lesson.

Good luck with that

[easilyscan 873]

Shocking that a real estate agent would be pushing for this. But in all seriousness, no one should be surprised. 

1/3 of all new car loans now have terms longer than 6 years, according to Experian. NPR Oct 31, 2019

 

[Drizzay 700]

If child care wasnt more expensive than my principle on a per monthly basis, I wouldn't need a 30 year mortgage.

[shorepatrol 1,870]

12 minutes ago, Drizzay said:

If child care wasnt more expensive than my principle on a per monthly basis, I wouldn't need a 30 year mortgage.

Get 3 jobs and keep your wife at home. Easy peazy 

[Sean Mooney 1,949]

16 hours ago, RLLD said:

OK, here is what happens...

First, you enhance affordability for people who have the credit to secure that mortgage.  But what is actually happening is people who were not in the market.....enter the market....and that is called deeeemmannnnddddd.... Ok kids, anyone know what happens when demand rises?

I tried to explain supply and demand with oil prices last year and the people on the right here lost their damn minds....So no- there are a lot of people here who don't understand how demand affects markets. 

[RLLD 4,154]

23 minutes ago, Sean Mooney said:

I tried to explain supply and demand with oil prices last year and the people on the right here lost their damn minds....So no- there are a lot of people here who don't understand how demand affects markets. 

Your time would be better spent explaining it to the government, maybe if they understood it they would stop shadow banning production.

[edjr 6,578]

Funny thing is, they would give a 40 year mortgage to a 65 year old couple. 

[lod001 1,344]

17 hours ago, posty said:

Can people really be this stupid?

"Forty-year mortgage stretches out that payment over a longer period of time, so it makes for a lower payment, which is what a lot of buyers need right now," Gonzalez said.

They are and they are getting dumber. Worked with the cars. Stretched that out to 72 months. 

 

10 hours ago, easilyscan said:

Shocking that a real estate agent would be pushing for this. But in all seriousness, no one should be surprised. 

1/3 of all new car loans now have terms longer than 6 years, according to Experian. NPR Oct 31, 2019

 

...or longer. Fock. I'll stick with the Warren Buffetf strategy and continue to drive my 23 year old truck....because it still works.

[paulinstl 296]

8 hours ago, edjr said:

Funny thing is, they would give a 40 year mortgage to a 65 year old couple. 

Smart play by the borrowers. No way they make it to term and they save money each month. I doubt future equity would be an issue. Smarter than doing an Adjustable Rate, because they wouldn't need to refi, probably.

[RLLD 4,154]

22 hours ago, Strike said:

If everyone would just sell their homes for what they are "worth", i.e. 50% less than market value per RLLD, this wouldn't be an issue.

Even better, sell it for twice its value….crashing the economy is just good fun after all

[Strike 5,271]

4 minutes ago, RLLD said:

Even better, sell it for twice its value….crashing the economy is just good fun after all

That's always been your problem - There is no such thing as "twice it's value" when two consenting parties agree on a price.  Unless you live in Russia maybe. 

[RLLD 4,154]

11 minutes ago, Strike said:

That's always been your problem - There is no such thing as "twice it's value" when two consenting parties agree on a price.  Unless you live in Russia maybe. 

Actually there is, and that fact was demonstrated. You see when you pervert the market you separate prices from the natural controls….just like this 40 year mortgage would do

We know it’s true because it happened

[OldMaid 2,129]

On 4/13/2023 at 12:49 PM, RLLD said:

OK, here is what happens...

First, you enhance affordability for people who have the credit to secure that mortgage.  But what is actually happening is people who were not in the market.....enter the market....and that is called deeeemmannnnddddd.... Ok kids, anyone know what happens when demand rises?

Ok, but on the flip side of that: what happens to the rental market when not being able to afford a house drives up demand? At some point everyone’s kids are going to live with them until they die.

[Strike 5,271]

14 minutes ago, RLLD said:

Actually there is, and that fact was demonstrated. You see when you pervert the market you separate prices from the natural controls….just like this 40 year mortgage would do

We know it’s true because it happened

Wrong.  The market was perverted by government policy, Wall Street, and lax oversight of Wall Street, NOT by people selling their homes for "more than they were worth."  Those homes were worth exactly what people paid for them under the market conditions.  Those market conditions may have been artificial resulting in higher values than should have existed, but those values were valid nonetheless.

[seafoam1 2,819]

24 minutes ago, RLLD said:

Actually there is, and that fact was demonstrated. You see when you pervert the market you separate prices from the natural controls….just like this 40 year mortgage would do

We know it’s true because it happened

It's funny you posted this when you did because I just today saw an ad for a little electric motorcycle and I wanted to see why they are charging $7000 for it. It's like one of those 30mph bikes that they say are fun offroad and around town. I don't know how 30mph gets you around town without large vehicles piling up behind you cursing you out but that's another story.

Anyway, the bike is $7000, and in the ad they are offering, financing for $105 a month. I didn't read any details. But at $105 a month that's about 5.5 years to pay off the principle on it. The type of people needing to have that type of payment on it to be able to afford it shouldn't be buying it.

But we fight for government and people in authority to not put rules in place for everyone simply to prevent the stupid people from ruining their lives so that creates a conundrum. You don't want to mandate that everyone can't have super big gulps because everyone isn't 300lbs with severe diabetes. Shouldn't tell people they can't be stupid financially because some people may know how to make more money in real time by having the cash on hand than what they are paying in interest on some things. Or whatever reason.  

[RLLD 4,154]

15 hours ago, OldMaid said:

Ok, but on the flip side of that: what happens to the rental market when not being able to afford a house drives up demand? At some point everyone’s kids are going to live with them until they die.

The more you try to control the market through these perversions the bigger the snap back when it corrects

[RLLD 4,154]

14 hours ago, Strike said:

Wrong.  The market was perverted by government policy, Wall Street, and lax oversight of Wall Street, NOT by people selling their homes for "more than they were worth."  Those homes were worth exactly what people paid for them under the market conditions.  Those market conditions may have been artificial resulting in higher values than should have existed, but those values were valid nonetheless.

Correct. Maybe you care why it was perverted, I do not. 

[TimHauck 2,633]

15 hours ago, OldMaid said:

Ok, but on the flip side of that: what happens to the rental market when not being able to afford a house drives up demand? At some point everyone’s kids are going to live with them until they die.

Home prices and rents seem pretty correlated to me.    If rents get too high, then people will try harder to buy.  But right now for example it seems you can probably rent for a decent bit less than what a typical payment would be for someone taking out a mortgage today.

[HellToupee 1,609]

Quote

https://www.marketwatch.com/story/no-you-cant-get-a-40-year-mortgage-so-why-was-that-search-trending-on-google-dbd438df

Quote

No, you can’t get a 40-year mortgage. So why was that search trending on Google?

Aarthi Swaminathan

Last Updated: April 14, 2023 at 9:12 a.m. ET

Earlier this week, there was a spike in Google searches for a 40-year FHA mortgage loan. One lender debunked the myth that there is such a thing.

Getty Images

 

First Published: April 13, 2023 at 3:54 p.m. ET

By

The bottom line: There is no new 40-year home-loan product. It was all a big misunderstanding.

 

Earlier this week, the internet was abuzz about a new type of home loan: a 40-year mortgage. Google searches for “40-year mortgage rates” spiked 450% — and searches for “FHA 40-year mortgage 2023″ jumped more than 2,650%. 

But the excitement was misplaced, because there is in fact no new 40-year mortgage. One mortgage lender shed some light on what the news was really all about.

The bottom line is that there isn’t a new 40-year home-loan product. It was all a big misunderstanding, Brian Rugg, chief credit officer at LoanDepot, said in a statement.

“Content goes viral on social media for a reason. It’s easy to believe advice you see or hear from TikTok videos that have a lot of views or likes, but it’s important for people to stay vigilant, do their research and help avoid spreading misinformation,” Rugg said.

So what exactly is this “40-year mortgage”?

Advertisement

The product is not available for loans to purchase a new home or to refinance, Rugg said. It only applies to current homeowners who have Federal Housing Administration mortgages and who are in financial distress, have already defaulted on their loan and need help.

A 40-year loan modification — not mortgage — can help these borrowers avoid foreclosure, Rugg said, by extending the duration of their mortgage to 40 years, which makes their monthly payments a little more affordable and brings their loan back to current status.

Also read: ‘Baby boomers have the upper hand in the home-buying market’: First-time buyers, meanwhile, struggle to get on property ladder

In the U.S., most people are familiar with the 30-year mortgage, a conventional, tried-and-tested financial product that gives people decades of stability in terms of monthly housing expenses. There are also other common types of mortgages, including 15-year fixed-rate mortgages as well as adjustable-rate mortgages, which can run for shorter terms, such as three, five or 10 years.

Loan modification is “a program offered by lenders [and] designed to avoid more dire outcomes,” such as a foreclosure or a short sale, “when a borrower is struggling to make timely mortgage payments,” according to Mortgage News Daily.

The government introduced the loan-modification program last year to help households that were falling behind on their mortgages.

Although extending a home loan over a longer time frame may carry some benefits, such as lowering monthly payments, experts warn that there are also drawbacks. Borrowers may end up paying more in fees and interest, for example, and a loan modification could also affect their credit score.

 

 

 

[iam90sbaby 2,503]

1 hour ago, TimHauck said:

Home prices and rents seem pretty correlated to me.    If rents get too high, then people will try harder to buy.  But right now for example it seems you can probably rent for a decent bit less than what a typical payment would be for someone taking out a mortgage today.

Serious question, do you know anything about anything?

[TimHauck 2,633]

3 hours ago, iam90sbaby said:

Serious question, do you know anything about anything?

You don’t think rents and home sale prices are correlated?  It’s not exact, but there’s a definite relationship although for the most part in the past 30 years or so they’ve both gone up except for the 2008 crash when rents plateaued while home prices declined

[cmh6476 1,016]

There's games to be played with mortgage rates.   This is probably the last tool off the belt I would want to use though.