A very good friend of mine recently sent me a post from his blog were he commented on the rise of support for the idea of 100 year mortgages. On face value it seems a little preposterous, however it does offer the option of allowing people to refinance and stay in homes on which the may be facing foreclosure at much lower payments and at the same time offer a transparent way to expand home ownership. The article my friend sites says that while opponents decry the lack of equity building in such an arrangement, is it any worse than consigning people to rent where they have no chance of equity at all? At least if they had ownership even with a 100 year mortgage, they may have the chance for equity if the market improves in time as it has historically in the past. Perhaps it is an idea whose time has come.
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Annapolis Anne Arundel County Maryland Residential Real Estate Agent.
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The 100 year mortgage would give me something to pass on to my kids besides my Master Card bill. LOL
Take care.
100 years is a long time, maybe 50 year mortgage. However I like what the payment looks like.
I would hate to see the amount of interest paid over the life of the loan on one of those.
I grabbed my calculator for this one, Charles, and, in the sample I worked out the payment on a 100-year mortgage amortisation was about 77.8% of the payment on a 25-year amortisation. Despite that fact that you would be paying almost nothing off on the principal in the first few years, I think this might be helpful if the arrangement was that the 100-year amoratisation was used for a term of no more than 5 years, to be followed by something shorter term as income increased. But how do you control for that? Monthly bills are pretty demanding, and I wonder if 100-year amortisations were available if people would get used to using them and then we would have many more people approaching retirement still carrying substantial mortgages.