Federal Housing Administration greenlights 40-year mortgages

[Uachet]

Majority of new homebuyers are first time home buyers. They more than likely will be selling that home anyway. Very rare that someone keeps a mortgage maturity. They will refi to a lower rate and term, as the market shift.

Buying a home with a 40 year mortgage will also slow the rate of equity gain on that home. So unless the appraisal value rises quickly on the home, of which I am willing to bet 40 year mortgages will not in the higher value and faster growing real-estate markets, the people selling them will come out the deal with little to no gain. They will have a greater chance of losing money on the deal depending on the market at the time. To actually get past that equity breakpoint will take longer, and be less likely to happen for 40 year mortgage purchasers.

 

[UWasntThere]

So instead of lowering inflation they’re doing shyt like this.

 

[Uachet]

Just another solution or remedy that will backfire

Oh, it is a solution to a problem that will work exactly how they desire it to work. More people taking out the longer loans, means more money for the banks that are probably pushing this forward as a solution. What happens to the people taking out the loans do is unimportant to them, only their bottom line counts. That is the Profit Maximizing way.

 

[IIVI]

The United States ain't a country with a "culture" like Switzerland, Mexico, Japan, etc.

Instead it's a bordered tax zone to exploit people and make money from.

Absolutely ridiculous as it is that people give up 30-40% of their paychecks to taxes.
Then that dollar gets taxed another 7.25% (in Cali) when you go to buy something.

Yet all these taxes still don't mean free healthcare, good roads, etc.

$4 trillion dollars paid in taxes for 2022 alone and our roads still busted?! People still on the streets?!

That means people are taking a big chunk of those taxes for themselves and barely investing it back into the public services they say they are.

Probably using that money to make more investments on start-ups.

That's what America is: more money for the rich on your behalf.

Of course they more highly immigrants here - because they want to tax them too.

 

[African Peasant]

Imagine being in debt for 40 years

 

[chineebai]

40 year mortgages goddamn . Depending on your interest rate you won’t see equity for a long ass time.

 

[vino]

Buying a home with a 40 year mortgage will also slow the rate of equity gain on that home. So unless the appraisal value rises quickly on the home, of which I am willing to bet 40 year mortgages will not in the higher value and faster growing real-estate markets, the people selling them will come out the deal with little to no gain. They will have a greater chance of losing money on the deal depending on the market at the time. To actually get past that equity breakpoint will take longer, and be less likely to happen for 40 year mortgage purchasers.

They will need to be in the mortgage for good amount of time where the 40 year mortgage depletes equity (to a point they can’t refi). I been doing loans for 10 years. Anyone getting a 40 year now, will be out of that loan soon. Also, the 40 year been on the market for while. There’s been lender’s offering this product as a portfolio. This is a great way for people looking to manage a monthly budget and avoid increases happening with renting. If done correctly, I have to add

 

[vino]

40 year mortgages goddamn . Depending on your interest rate you won’t see equity for a long ass time.

You go in the loan with equity, based on your down payment. This loan will still have an LTV loan to value requirement.

 

[BeeCityRoller]

This is bad and dumb. Do you think the average person that would finance for 40 years could afford a 20 or 30-year mortgage? No, they probably scraped by.

So what happens when their home insurance and property taxes increase, even if it is less than rent nearby? And do you think these are people that will have 5-10k saved for when the HVAC finally dies or the roof needs replacing?

If this catches on, guaranteed this group will be the largest group of foreclosures percentage-wise over the next 5-10 years.

The idea was to buy a home in your 20's/early 30's so your income would increase and pay it off early before retirement age or move up to a bigger home with the equity. Now Millennials and Gen-Z going to be buying homes in their late 30's/40's if at all and still paying PMI into their 50's when your income has fallen off.

Haven't heard a peep about Bidens Downpayment assistance in months. Not that 15-20k even goes a long way with the median price well above 300k in most major cities.

 

[vino]

This is bad and dumb. Do you think the average person that would finance for 40 years could afford a 20 or 30-year mortgage? No, they probably scraped by.

So what happens when their home insurance and property taxes increase, even if it is less than rent nearby? And do you think these are people that will have 5-10k saved for when the HVAC finally dies or the roof needs replacing?

If this catches on, guaranteed this group will be the largest group of foreclosures percentage-wise over the next 5-10 years.

The idea was to buy a home in your 20's/early 30's so your income would increase and pay it off early before retirement age or move up to a bigger home with the equity. Now Millennials and Gen-Z going to be buying homes in their late 30's/40's if at all and still paying PMI into their 50's when your income has fallen off.

Haven't heard a peep about Bidens Downpayment assistance in months. Not that 15-20k even goes a long way with the median price well above 300k in most major cities.

Theres normally a lower DTI % to get in to one of these loans. You’re not getting a financially strp person in this loan. It is not for your average buyer also. I wouldn’t advise this loan for most people but there’s circumstances where it work, based on what’s going on in this market along with home value trends (depending on location).

 

[King Sun]

 

[Uachet]

They will need to be in the mortgage for good amount of time where the 40 year mortgage depletes equity (to a point they can’t refi). I been doing loans for 10 years. Anyone getting a 40 year now, will be out of that loan soon. Also, the 40 year been on the market for while. There’s been lender’s offering this product as a portfolio. This is a great way for people looking to manage a monthly budget and avoid increases happening with renting. If done correctly, I have to add

I may need you to rephrase what you have bolded to make sure I am clear on what you are saying. Being in the mortgage and paying on time will deplete their equity. Is that what you are saying?

 

[beenz]

So instead of lowering inflation they’re doing shyt like this.

only one benefitting will be the banks

anything to keep folks making monthly payments in perpetuity.

 

[Arizax2]

I'm on pace of getting my mortgage paid off in 15years by putting a decent amount extra on the principal. I will be 49 when it's paid off. Probably sooner once I get some stuff straightened out. The goal should be to be mortgage free. Imagine the $ your get to stack and invest without a mortgage. Having that extra money to play around with before you retire is big. Also being able to retire and collect on your investments and social security without a mortgage . Stop with the bs $1,000 car notes and think about the bigger picture down the line folks.

 

[vino]

I may need you to rephrase what you have bolded to make sure I am clear on what you are saying. Being in the mortgage and paying on time will deplete their equity. Is that what you are saying?

The amount of time it takes to deplete their equity would be lengthy. They have to put a down payment on the home. With a 40 year, you’re probably not talking 3%. Also, in this market you’re refinancing out of that probably near the end of this year or next year. That time frame will not deplete equity. To deplete equity, you would need home values to drop more than what your monthly payment is taking off the principal. Every payment you makes shave off principal and then interest is applied.