50 YEAR MORTGAGES - HOW TO SOLVE THE FINANCIAL CRISIS

[Scythian]

My wife is sitting here griping about how we have to pay for all these people defaulting on their homes and she couldn't understand why they couldn't refi or renegotiate and avoid defaulting when she said something BRILLIANT.

They should give them 50 year Mortgages, that way the payment would be way, way lower, no bailout money needed.

Honestly, I think this could be a real solution, create a new kind of Mortgage for these folks, give them the chance to pay and still own the home, what do we care if they get 50 year mortgages, we don't have to bail them out this way !!!

[org.whodat]

One tax change the government needs to make, is that you cannot change your interest deduction schedule once you take the first home interest deduction. The concept of tax deductions for refinancing should never be allowed.

[JustaDumbBlonde]

"50 YEAR MORTGAGES - HOW TO SOLVE THE FINANCIAL CRISIS (vanity but a good one)"

Hopefully the title taught two valuable lessons. Run to the calculator before you run to the keyboard and don't rate your own vanity.

[GOPJ]

The difference in payment on 100K loan 50 years vs 30 years is only about $40 per month but an extra 110K interest over the 50 years.

It's always fun when facts get in the way of "great" ideas..

[castlebrew]

“We still have a box? Some homeless guy is probably living in it. “

You had a box! All we had was a paper bag in the hallway...

[KoRn]

"You had a box! All we had was a paper bag in the hallway"

I'm in the process of collecting thousands of boxes of all sizes. My goal is to build the first ever metropolis for homeless people. I may get the Nobel peace prize or something.

[RockinRight]

To try and do that now would cause a drop in real estate values so precipitous that almost anyone who bought in the last 10 years wouldn’t be able to sell their house for another 15 at least.

Most people who have 20% down now have it because of equity in another house - this would evaporate, therefore, leaving even fewer buyers, and compounding the issue.

The resulting number of people who are “upside down” would cause even more problems.

10% is a more reasonable number IMHO, and FWIW, there are few foreclosures at or above this level.

[RockinRight]

Got a spreadsheet for this? I think I get the gist, but it doesn’t seem to add up in my head.

[org.whodat]

To try and do that now would cause a drop in real estate values so precipitous that almost anyone who bought in the last 10 years wouldn’t be able to sell their house for another 15 at least.

Current figure is that we have about 10 million new unsold homes and more on the way. I don't think you need to worry about value. And if you do, study a little demographics and tell we what the market will be like when the baby boomers start the big die off. That's not very far off!

[org.whodat]

As the oldest of the nation's 75 million baby boomers approach the age of 60, a Pew Research Center survey finds many are looking ahead to their own retirement while balancing a full plate of family responsibilities - either raising minor children or providing financial and other forms of support to adult children or to aging parents.

[Titan Magroyne]

Hmmmmmmmmmm, bookmarking!

[ffusco]

Got Box? ;)

[Michigan Bowhunter]

Here is a link below to a website which you can use to plug in your information. It is a wonderful product but does not work well for people who have no positive cash flow....for obvious reasons.

http://homeownershipaccelerator.com/data/Simulator/

-click the get statrted button & then I agree

-The income section you will want to plug in your NET PAY & frequency. Click next to go to screen #2
-Enter your home value and what you owe.....you will need 20% equity to make this simulator work. Plug in your other obligations as well. You can also select to leave that debt in place.....click next
-select what your savings habits are of your net pay...this is defaulted for 10%......click next
-in the fourth field....this is defaulted to compare a 30 year mortgage for you. If you know your interest rate you can enter it by clicking the word INTEREST RATE which is highlighted in green near to bottom right corner of that page. Adjust the interest rate to where you are at on your current loan type. You will notice there is a margin assumption at the top of that adjustment page....leave it alone for now. Then click OK & then NEXT
-The program will calculate your interest savings and estimated time of payoff. You can make adjustments to the margin assumption and many variables to alter the outcome.
You will notice you will PAY OFF much sooner and you will build equity much faster.

Not too bad for an EVIL adjustable rate mortgage.

Mortgages are really about the amount of interest you pay ....not the payment.

If you pay more principal than interest, you will reduce the balance....30 year mortgages are about paying interest to the bank and what your payment is. This is a balance driven loan and is steered by your income. Since this is a line of credit....you can throw all of your income at it and get it back when you need it. And, the interest rate on this mortgage for me today is about 3%.....

The truth about mortgages is that a higher rate declining balance loan will pay off sooner than a stable, lowere interest rate loan. 30 year amortization is the death knell of the US financial system IMHO.

[listenhillary]

FAQ
http://www.homeownershipaccelerator.com/consumers/faq.shtml#1

Calculator
http://www.homeownershipaccelerator.net/home_loans/cmghome/calculator.html

[reagan_fanatic]

We still have a box? Some homeless guy is probably living in it.

I have two boxes, bought and paid for. Obama's gonna take one of 'em away, though, because it's selfish of me to have two boxes while those po' folks down the street don't have any.

[PLMerite]

“Why not 100 year mortgages?”

I think Japan has or did have that already...

[Titan Magroyne]

Thank you for the info! :o)