40 year mortgage? what the heck? (property tax, 30 year fixed, property, banks)
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So I know of someone who bought a house in the upper 400's with a 40 year mortgage. she doesnt even make 50k a year and hubby works construction but doesnt make a lot. Im wondering doesnt these 40 year mortgages spell T.R.O.U.B.L.E? I mean i had never heard of it before. is this the new craze?
They've been using them in Europe for quite some time now - for some people it's the only way to get their foot in the door of home-ownership.
So little principle is being paid-off each month that it's basically glorified rent - with the exception that you at least get to deduct your mortgage interest in the US (unlike the UK)
40 year mortgages are available, they're just not advertised. Just like 7-year fixed. Banks don't want you to go 40 years because, even though you're paying virtually interest only, it's a risk to them, because you technically can't afford the house at that term.
Glorified renters? lol tomato tomáto. 30 yr mortgages are glorified renters too. Home owner is such an oxymoron these days. The reality is that if house prices were corrected for median individual income people wouldn't have the need to amortize for longer than their expected work lives.
Length of amortization as a gauge for ability to afford? What a joke of a sliding scale. Most people on a 30yr fixed couldn't afford the same house on a 20yr fixed. I can make the argument all these 30yr fixed people can't afford their roofs either. The fact is that the average american household changes homes every 9 years. Forget 40yr notes, 9 doesn't even come close to 30 years either. All we're talking is how much appreciation can fall on your lap in 9 years. Who knows what that is, but the way I see it it has little bearing on whether you go on a 40 year fixed or 30 year fixed. That's it. Your 9 year appreciation vs. my 9 renting years of not lifting a finger and saving on maintenance costs and taxes and investing the rest of my cold liquid elsewhere. I know many people made great profits in the last nine years, but compared to a lot of people in the bubble areas, I know who made out ahead. Renters 1 "owners" 0.
*BLAH**BLAH**BLAH**BLAH*
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Your 9 year appreciation vs. my 9 renting years of not lifting a finger and saving on maintenance costs and taxes and investing the rest of my cold liquid elsewhere.
*BLAH**BLAH**BLAH**BLAH*
Wait, there's something worth noting in there. So you're a renter fan. Good for you. Keep on renting if it works for you. I take it your rent is somewhere in the ballpark of $800-$1200 a month?
I really don't like the argument "I don't have to pay maintenance!!", because it doesn't always apply. I've rented for 5 years and never had a maintenance request. Not one. Therefore, I didn't really save anything.
And...you said taxes, you do realize that mortgage interest is tax deductible...right? So much so that you could theoretically not have to pay property taxes because you just cut it out of your tax refund every year?
You should start respecting members here. It's an open forum with many different opinions. Whether you agree with them or not shouldn't give you any right to start belittling someone.
Quote:
Originally Posted by revelated
Wait, there's something worth noting in there. So you're a renter fan. Good for you. Keep on renting if it works for you. I take it your rent is somewhere in the ballpark of $800-$1200 a month?
I really don't like the argument "I don't have to pay maintenance!!", because it doesn't always apply. I've rented for 5 years and never had a maintenance request. Not one. Therefore, I didn't really save anything.
And...you said taxes, you do realize that mortgage interest is tax deductible...right? So much so that you could theoretically not have to pay property taxes because you just cut it out of your tax refund every year?
You should start respecting members here. It's an open forum with many different opinions. Whether you agree with them or not shouldn't give you any right to start belittling someone.
What belittling? That I find someone's propensity to put down those who choose to buy, irrelevant in the grand scheme of things?
He/she was making a broad statement. You're taking it personal by replacing his words with BLAH BLAH BLAH. Seriously, cut it out.
I take nothing personal, which is why I removed them thusly; there's no emotional or logical attachment to anything else that was said.
My reply was as straight as an arrow. I made no "broad" judgment about renters the way they did about buyers. I expressed a personal take on it.
To the last three words of your post...there is a feature on this board that allows you to ignore people like me. I suggest you use it if you don't like my approach.
To the last three words of your post...there is a feature on this board that allows you to ignore people like me. I suggest you use it if you don't like my approach.
May I make a suggestion to you? Please read "Terms of Service". I also interpreted your "Blah, blah, blah" as disrespectful. No inflection or tone can be interpreted from written words so its very easy to be misunderstood. Please heed the advice to be respectful, even if you don't agree with whats being said. This board is for sharing of useful information - not flaming others points of view
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