50 year mortgage?

Question

I'm 33 and my husband is 34
whould a 50 year mortgage work for us.
I heard that is the way to go when buying your first home in Los Angeles due to the high cost homes.

Answer 1

if you;re rate is farily low than yes. although to get a 50 amortization on a loan you need to have fiarly good credit. there are other options like ARM's and option arms or MTA's that will yield you lower monthly payments without having the burden of a 50 yr amortization hanging over your head. most lender will only go to 40 yr but it's totally up to you and what you're comfortable with. if you think the 50 yr will work better, then go for it. your total finance charges will be astronomical but the payments will be lesser.

Answer 2

A 50-year mortgage doesn't necessarily mean that you will keep the loan that long - it's an amortization that will help borrowers reduce their monthly payment - i.e., the loan is spread over 50 years.

The likelihood of you keeping your house over that period may be almost close to not. As years progress, your lifestyle may change and need to move to a bigger house or a smaller one; perhaps a relocation - whatever time determines.

I haven't seen any lender offering a 50-year fixed; but I know there's already a 50-year amortization available on adjustable programs. Very few lenders are offering this product.

40 and 50 year amortization was made available due to the increasing house prices where most borrowers can no longer afford. To accommodate these growing concerns, FannieMae/FreddieMac and/or lending institutions came up with alternative solutions that will help borrowers still attain their dream homeownership by way of availing a longer amortization period to relax the monthly repayment figures borrowers will pay on a 30-year term.

To obtain a 50-year mortgage, borrowers will need to embrace a higher interest rate since rates are based on risk-mitigating pricing adjustments.

Answer 3

A 50-year mortgage is a pretty poor use of your money. Unless property values skyrocket, you won't be building any equity at all till you're into about the 12th year of the morgage, maybe even later. And since California real estate is already very high, there's not much chance that your equity is going to go up all that dramatically. That means even though your payments are lower, the bank still owns more of the house than you do. It's not a good trade-off. Your payments won;t be all that much lower, and you get no equity in return. I think it would be better to continue renting for a few years, save up a sizeable down payment, and get a 30-year note that you can afford.

Answer 4

The primary reason people get a 50 year amortization loan is to minimize their payments, pure and simple. You don't get this loan with the hope of paying it off. With lender restriction on interest only loans become tighter, 40 and 50 year amortization loans have been introduced into the market in order to help people reduce their monthly payments. Unlike an interest only loan, a (SMALL) portion of your payment does go to paying down principal.

If you are a first time home buyer, a 50 year mortgage may be right for you if you are trying to minimize your payments. Most 1st time buyers refinance within the first 2 to 5 years of ownership in order to obtain loan with better loan terms anyways. A couple of notes of cautions: Find out if the loan is a true 50 year mortgage or a 50 year amortization with a 30 year term. What the latter mean is, if you kept this mortgage for 30 years, you would have a ballon payment at that time. Also, find out if your loan would come with a pre-payment penalty. This is important to know for all loans. I am a licensed CA mortgage professional. If you would like assistance in identifying the best mortgage for you, please contact me at [e-mail].

Answer 5

Housing market continues to slump. It is all over the news. I know some agents or realtors are still using scare tactics to convince buyer to get into the market.

I would fire you agent. Please see following news links. They are from CNN.

http://money.cnn.com/2006/09/08/real_estate/caught_in_the_bubble/index.htm?postversion=2006090814
http://money.cnn.com/2006/09/05/real_estate/Ofheo_home_prices/index.htm?postversion=2006090514

If you wait for a few more months, you can buy same houses with 10% less. If you wait a bit longer, may be even 20%. It usually takes a few years for housing market correction to resolve. No hurry. :)

As housing market continues to slump, if you don't plan to delay your plan, please interview several and pick a good realtor or agent.

Bad ones will talk you into buying the largest property at your credit limit. Good ones will find you a good deal (Sellers are offering discount and incentives now).

Try to stay away from Adjustable Mortgage, because 30 year fix mortgage rate is very low right now. There is no reason to use Adjustable loans except fatter commission for loan agents.

Interests only loans are not good iether. Mortgage payment consists of two parts: interests and principal. Interests are like rent, which doesn't add to the equity to your house. It simply disappear as your pay it. If you want to use interests only loans, might as well rent, especially during market downturn, because housing price won't appreciate.

Finally, for tax benefits, talk to your CPA or tax accountant. Do not consult finance with realtors or agents. They get commissions when you sign the check!

Finally, this article has good tips on how to lowballing the asking price. Yep, despite what your agent said, you can negotiate. :)

http://biz.yahoo.com/brn/060909/19463.html

Good luck!

Answer 6

Any homestead purchase own loan in eire and uk has mandatory own loan protection coverage. interior the form of the debtors' deaths, this coverage plans will pay off the the remainder of the indoors maximum loan. 50 365 days mortgages are very no longer likely. i understand a pair elderly 60 who have been constrained to a ten 365 days era with the aid of their financial business enterprise. I extremely have because of the fact heard the financial business enterprise don't have discriminated on age grounds, yet that's effectively what passed off. the different debt comes from the valuables of the deceased. often times which means the homestead ought to be offered to pay those expenses, so all the inheritors go through the two with the aid of inheriting much less - no longer in user-friendly terms the eldest newborn.

Answer 7

First of all I don't even think it is possible to get a 50y mortgage and even if it was would you like to be 83 years old and still be paying a mortgage?
Try more resources on some creative financing and try to see at 15y if possible. If too expensive at least get a 30y one with some flexibility on paying it of quickly. The longer you take to pay of your debt the more interest you pay.

Answer 8

You are in Los Angeles just hold on and save your time will come and very soon, as we return to the glory days of the late 80's. see why the market has a bubble, before you buy.

http://www.breakingbubble.com/index.htm

Answer 9

Sounds about right to me just make sure that you get a good interest rate as low as you posibly can get.

Answer 10

Till death do us part...no not husband and wife......Husband and mortgage.