The 50 Year Mortgage May Be The Answer

This was bound to happen sooner rather than later. With higher prices for real estate, mortgage rates on the upswing and increasing pressure from regulators about exotic mortgages that allow buyers to increase leverage and thus purchase homes which otherwise may be beyond their means, mortgage terms had to lengthen.

I received a flyer from a mortgage company offering 50-year residential and commercial mortgages this past week. It's the first such flyer I've received, although I have known such offers would be coming soon.

Let's not analyze the pros and cons of this too deeply right now. Sure, some will see the 50-year mortgage as the savior to the home mortgage and real estate business while others will find fault in financing a property for half a century with interest. They'll all be making their voices heard in the coming months about this subject. But on the surface such a mortgage might make monthly payements more affordable in the face of high real estate prices and thus bring home ownership closer to people -- especially to younger folks and first time home buyers who are probably struggling right now.

Frankly, if somebody wanted to give me 50 years to pay off a mortgage at a competitive interest rate instead of 20 or 30 years, I'd be more than willing to take them up on the offer. How 'bout you?

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