Comments on: Disputing 30 Year Versus 40 Year Mortgages.

By: David

David — Mon, 14 May 2007 04:51:12 +0000

Makes sense to me too Donna!

By: Donna

Donna — Mon, 14 May 2007 03:59:27 +0000

My husband and I are retiring from Oklahoma to Texas. (health and children)

We are going to mortgage our new home for 40 year fixed rate.

At 71 and 68 we do not plan to pay off the mortgage. The monthly savings allows us to keep our savings and reduce our monthly debt load.

When we sell the new owner can refinance or not.

For us it makes sense

By: david

david — Thu, 19 Apr 2007 21:45:13 +0000

Thanks for the comment Lisa. It all depends on circumstance in my book…thats why I dont mind the 40 or 50 year if it is the right move for someone’s family!

By: Lisa Knight

Lisa Knight — Thu, 19 Apr 2007 13:48:48 +0000

I think the only way I would ever mortgage a house is with a fixed rate, there are too many problems right now with the rates increasing. I can see their purpose, if the rates are already high, then they will adjust down as rates drop. But do they really drop as equally as they rise? I would consider a 40 – 50 year mortgage, as long as there aren’t any penalties for early payment, looking at that initial low principal payment might send me into shock!

Of course I don’t live in an area with inflated housing prices, just inflated taxes. The average house on the market here runs between 70 & 100K depending on location, but our property taxes have increased $1500 since we bought 3 1/2 years ago.

By: david

david — Wed, 18 Apr 2007 16:21:41 +0000

I agree 100% martha…sometimes its about more than just the $ amount or the term.

By: martha in mobile

martha in mobile — Wed, 18 Apr 2007 16:18:20 +0000

Housing costs (including taxes, insurance, & maintenance), safety, schools (if you have kids), expected salary growth, time to retirement, and lost opportunity costs should all factor in to your mortgage decisions. I live in a low-cost market, have a relatively short time until retirement and don’t do a whole lot of traveling or want to drive expensive cars, so a 15-year mortgage on a moderately priced-house (less than 2x than my family’s gross annual income) works for us. But in a different scenario (such as for a young person with children) getting your foot in the door with a low, fixed-rate 40 year mortgage on a modest home in a safe neighborhood with good schools would be a very good idea, indeed.

By: David

David — Wed, 18 Apr 2007 15:36:45 +0000

No, thats fixed ciwood, at least it is around here.

By: ciwood

ciwood — Wed, 18 Apr 2007 15:32:08 +0000

You are comparing a 30 year fixed rate with 40-50 year variable rates. No investor is going to lock their money up at a fixed rate for 50 years. I do not believe that it is possible to get a fixed rate 50 year mortgage nor a 40 year fixed rate.

I initially thought the 40 year mortgage would be a good deal until I realized that it is a variable rate.

By: david

david — Mon, 16 Apr 2007 23:10:38 +0000

Good point…its not the “typical” American dream. Thanks!

By: caseyserinsbrother

caseyserinsbrother — Mon, 16 Apr 2007 22:50:57 +0000

Why is renting not the American dream? As rent is cheaper than a mortgage in most places, maybe the dream is to use the difference to go on vacations or build a stock portfolio. Maybe the dream is to move every couple of years around the country or world. That would be pretty hard to do when you own a house.