Should You Consider a 50 Year Mortgage?
The local newspaper produces a weekly periodical which is given to everyone for free, and it’s filled with all sorts of advertisements. I read it because there are usually grocery coupons in it and I can save a couple of bucks every week. I saw an advertisement for a local mortgage company who was now offering a 50 year mortgage. It said, “Save Money With Our New 50 Year Mortgage!” I hope nobody actually falls for that! I would be in my seventies before I paid off that house! I can only imagine what amount of interest I would be paying for one of these loans.
It seems that mortgage companies and credit card companies are no longer concerned about whether you actually pay off your debt any more, and apparently people aren’t either if they continue to get suckered into high credit card debts that would take decades to pay off and 30, 40 and 50 year mortgages! These finance companies are telling us to borrow, borrow and borrow for the rest of our lives, and are seemingly unconcerned whether or not we will actually pay off our debt. It looks good on paper though for them with all of the interest that they are earning.
Most people would probably be pretty excited about the possibility of paying a mere $252.86 for a loan of $100,000! That’s a really decent payment, but what they don’t tell you is that it would take you 50 years of $252.86 payments, and even then you wouldn’t pay it off, because they were offering an interest only loan! In order to get a fully amortizing mortgage payment, you would have to pay $526.40 a month! If you moved that down to a 15 year mortgage, you would only be paying $803! For $275 a month more, you are escaping 35 years of bondage!
If you buy into a 50 year mortgage, you are making a conscious decision to be in debt for life and that you have decided that you do not need to take control of your money, and instead have accepted that financial bondage is acceptable. This might sound a bit harsh, but it’s the truth. 50 year mortgages are nothing more than financial servitude. Many Americans have fallen for the trap that debt is a way of life!
It’s time for this to change. Don’t accept that you will be in debt forever, instead fight it. Work like crazy, and put every extra penny you have toward your house payment. There is a light at the end of the tunnel! You can pay off that debt. Get a a shorter term mortgage or an offset mortgages and pay it off ASAP. You can do it!