Many rich and powerful people have benefited tremendously from the housing bubble. Some of them want it to continue at unreasonable costs. As reported by Inman News, 01/04/05:
Just as folks are getting used to the idea of 40-year mortgages, securities issuers are upping the ante, talking about possible amortization schedules of 50 years, according to industry professionals.
"It's a good idea for consumers," said John Marcell, president of the California Association of Mortgage Brokers. "There's nothing wrong with a 50- or 60-year
mortgage."
Nothing wrong? Even if you are 25 years old and take out a 50 year loan you will finish paying off the loan at age 75. The other major problem is the monthly savings on 50 year or 60 year loan compared to a 40 year loan is negligible.
300,000 Mortgage Loan, 6.5% Interest, Fixed,
Monthly Payments
1756 = 40 year
1691 = 50 year
1658 = 60 year
(Source: Bankrate Mortgage Calculator)
So if one decides to takes out a 60 loan they would save less then $100 a month over a 40 year loan ( 6.5% fixed rate).
John Marcell is a bubble cheerleader and a professional liar. Clearly, there is something wrong with a 50 or 60 year loan. Challenge these 'experts.'
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