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A 70 Year Loan? I'll Be 110 By The Time I Finish Paying It Off...

I had this nightmare: My boyfriend bought me this 8 carat diamond. I freaked out.

"How did you pay for this?" I asked.

"Don't worry about it; it's only $ 499.99 a month", he calmly responded.

"How long did you finance it for?"

"70 Years!" he said.

OK. Maybe not 70 years, but what's with these 50 years loans?

Can someone please explain to me, why the boys in the suits and fancy offices keep devising new plans to keep the general populace in debt, instead of creating new ways to get them out of debt?

Can anyone explain the value of the 70 year loan?

Just don't tell me that it's interest only with negative amortization...

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Posted by Myrtle Beach Real Estate by Mirela Monte on 12/21/2007 01:28 PM

Comments (25)

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Originally posted at: Myrtle Beach Real Estate by Mirela : A 70 Year Loan? I'll Be 110 By The Time I Finish Paying It Off...

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25 Comments on A 70 Year Loan? I'll Be 110 By The Time I Finish Paying It Off...

DEC

2007

Japan has been using a 100 year product for a number of years. It's all perspective.

That's funny!

That's news to me. Thanks Chris!

Thanks, Thomas! Appreciate the comment!

How many people really pay off their mortgage in full these days? It is just another way to qualify customers. I don't sell them myself but I can kind of see their point of view.

It's only a bit different than an interest only loan.....For some borrowers it might be the loan for them!

Bob Mitchell

ValueList Real Estate Services, Inc.

I didn't realize that there was a 70-year loan available now. WOW! I heard about the 40-year loan this past year.

No 70-year loan that I know of. Not YET, anyway. They do have the 50 yr. loans.

Thank you for your comment, Jason!

Thanks, Bob!

Thanks, Naoma! I know that it will appeal to some folks.

First we'd have to determine what the dream was!

Was it the ring?

Was it a boyfriend?

Or all of the above?

To understand long term financing we must first accept that life is fleeting! Some things are most useful at certain times during life, the big home is most valuable when the family is young and together, empty nesters rarely need 4,000 sq. ft. 4 bedrooms and 3 1/2 baths. While the empty nesters may well be able to afford the big home, the young need it, long term financing allows people to fulfill the need when it exist!

Your concern over long term financing would be justified if you were talking about deprecating assets. (Yes, I know about the current market. I also know American history, we've had problems before, but they have always corrected themselves, in short order.) There would also be a problem if mortgages often fully amortized, they don't. Our Grandparents or Great grandparents took out a 15 to 25 year mortgage and paid it off in instalments your parents didn't and neither will you.

With regards to financing that big ring, if you see yourself the object of lust like a new car, no ring should be financed past your 35 birthday! If you're the reason he lives, if there is no life without you, if you're his definition of everything good in life, if he needs you to survive, thank God for long term financing!

Long term financing is a good and useful tool for need not desire, love not lust, forever not today, commitment not convenience. It's not for deprecating assets, short term use, of just time sharing.

Bill

William J Archambault Jr

The Real Estate Investment Institute

PS: Brenda and I will soon be celebrating our 37th. She is my reason for living and defiantly an appreciating asset!

I don't get it either. Why would anyone want a 70 year loan. We're getting so used to debt that we expect it to last for a lifetime. It really is too bad.

If you sell the house to your kid at birth they will be able to retire with a paid off home. Thats the trick to making home ownership affordable to all of our children don't you know!

DEC

2007

Congratulations, Bill on your upcoming "37-th Anniversary".

I prefer the ring to be plain, simple and durable, just as the marriage...

In my story... the 8 carat diamond was a nightmare....

I like your reasoning. It's good and I thank you for taking the time to explain!

I have a theory about people who can stay married for as long as you have. Simply put, they are better people. They are less self centered, more maleable, better communicators, and they have learnt to sift through life's trials and differentiate between the issues they can compromise on and the ones that matter and are worth making a stand for...

Congratulations, Bill on your upcoming "37-th Anniversary".

I prefer the ring to be plain, simple and durable, just as the marriage...

In my story... the 8 carat diamond was a nightmare....

I like your reasoning. It's good and I thank you for taking the time to explain!

Thanks Lola! I love your name!

That's funny, Jeffrey, but oh, how true...

Thanks for the comment!

I had no idea that was possible. This is getting out of control, Americans are going to have to wake up and look out for their own financial interests.

Yes, that would certainly help...

I think it would help if we start educating them starting with 6-th, or 7th grade. "Financial Responsibility education". Sounds good to me, doesn't it sound good to you?

Thanks for the comment Cristina!

Hello, I guess that I must look at debt a little different than others. We pay off our homes as soon as we can and feel that we pocket the interest back into our investment program. Our longest payoff on a home that we bought, value $300,000.00, was five years. Our current home we paid off in 12 months. I bought my first new home when I was 19 years old and I hated makeing those monthly payments. To each his own.

Don Eichler

Good for you, Don! You are a rarity indeed!

I thought I was doing well by paying additional principal on all my homes every month...

Good for you! Spread the word!

Mirela - I think your dream may become closer to reality than you think. As Congress and the banking system look for ways to make home loans more affordable one of the possible ways is to extend the term. Is it a good idea to have a loan for longer than you are expected to live? Well that sounds like the title for another blog.

Well worded, Nate! Thanks for your comment.

I guess they've been doing this in Japan to the tune of 100 years (see comment at the top). The shred of hope of paying the loan off becomes impossible indeed...

FEB

2008

Yes, this is becoming closer to reality.

NOV

I just brought this out of retirement. Any news on the 100 year loan yet?

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