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Posted by  MichiganAl on 5/14/06 8:25pm
There are plenty of situations where a 50 year mortgage would be perfectly acceptable and beneficial to a borrower. The average person only lives in the same home for five to seven years. Who cares if it's a 100 year mortgage if they move in five years? They're barely knocking any principal off anyway, so they might just want to keep the monthly payments low. Plenty of people with poor credit are looking for a short term fix to give them a few years to get their credit in shape. That's why plenty of people do two or three year ARMs. So again, who cares if it's a 50 year loan? If it lowers their monthly payment and they know they're going to refi in a year or two, it does what it needs to do.
Beware of the 50 year mortgage? Okay, well beware of interest only loans, too. And beware of balloon notes. And beware of ARMs. Beware of anything that isn't a fixed note because they can all be dangerous if you don't understand what you're doing. They're all tools that can be used wisely or abused.
Beware of predatory lenders? Sure. Understand your situation and the best options. Of course. Beware of the 50 year loan? Nah. |
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