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50 Year Mortgages

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Things really must be bad.

http://firstrung.co.uk/articles.asp?pageid...1538&cat=47-0-0

'As 40-year mortgages become common place in the US, the UK could follow suit as securities issuers are upping the ante, talking about possible amortization schedules of up to 50 years, according to industry professionals. Could these products be of particular benefit to first time buyers limiting their initial outlay in the early crucial years?'

No! Methinks

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Things really must be bad.

http://firstrung.co.uk/articles.asp?pageid...1538&cat=47-0-0

'As 40-year mortgages become common place in the US, the UK could follow suit as securities issuers are upping the ante, talking about possible amortization schedules of up to 50 years, according to industry professionals. Could these products be of particular benefit to first time buyers limiting their initial outlay in the early crucial years?'

No! Methinks

This is good news, clearly. More people will be able to get on the ladder, which is great for everyone. If anything this proves that there isn't a bubble - why else would the banks lend the money?

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Hence, a 50-year or 40-year mortgage could leave the borrower with precious little equity when it comes time to sell or refinance, the two pointed out.

"These loans are good for some people. The problem is that they aren't good for everyone. Everyone in California wants to buy a house, but in some cases, financial disaster could happen by putting them in these products," the mortgage association president said.

So no money through equity - just debt.

Mmm...... still No

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talking about possible amortization schedules of up to 50 years

Welcome to your new home. Better hope that you like the flat still in fifty years time and the area is just as nice (or not as the case may be) as it was when you bought.

Suckers.

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Guest Charlie The Tramp

Mortgage of 200k at an average 8% rate how much interest paid on a repayment mortgage over a 50 year period?

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Less than you would pay in rent over 50yr!!!!

Mortgages go down as wage inflation goes up, Rents go up and up with inflation.

And anyone who subscribes to the Theory that inflation is dead in the water, had better go and get their head inspected.

Wages in 20yrs time will be double what they are today, minimum.

Edited by laurejon

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Mortgage of 200k at an average 8% rate how much interest paid on a repayment mortgage over a 50 year period?

Monthly payments of £1,358.55, so total repayable is approx £815K - bargain.

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Asensible person would look and say...'Why do we need 40 year and 50 year morgages when these havent been needed in the past'

Sound likes trying to keep a bubble inflated.

Adding more loose products to a deflating market!!

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Longer mortgages don't really help all that much do they? Since the majority of the initial payment is interest on the principal the amount that a FTB can afford (payments at the start of the mortgage) on a 50 year mortgage isn't anything like twice what they can afford on a 25 year mortgage, though the amount they pay out in the long run is.

Writing a quick hacky program, I estimate that assuming 5% interest calculated monthly, a person can borrow £200K, and pay it off over 25 years by paying £1170 per month. The total paid will be £351000 (ignoring the last incomplete payment). If they are going to extend the mortgage to 50 years, then they will be able to borrow very slightly more than £257500 and pay it off in 50 years at £1170 per month for a total of £780300 paid. It's only at £280800 where the principal will never be paid off, or where £1170 becomes the interest-only payment. So the massively longer mortgages don't really help affordability (in terms of affording the monthly payment) all that much. But they sure destroy the buyer's long term wealth.

Billy Shears

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I'm I the only one who remembers 100 years mortgages in Japan? Famlies had to prove they had a son to assume the debt.

Poor kids.

:unsure::unsure::unsure:

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Wages in 20yrs time will be double what they are today, minimum.

In China, certainly: but probably not in the UK.

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Buying a House with a 90-year Mortgage in Japan

Yesterday's NY Times included a story by Martin Fackler about Japan's devasting real estate bubble. The thought comes to mind--could it happen to US? He profiled a man named Yoshihisa Nakashima who bought a condo 14 years ago for a price of about $400,000. He was convinced it would go up in value, and moved there even though it was far from his job in Toyko.

Today there is no way out, the condo is not worth even half of what he paid, and he's got a $300,000 anchor keeping him there.

http://www.gonomad.com/readuponit/2005/12/...ortgage-in.html

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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