Saturday, January 27, 2007

50-year mortgages: low payments, low equity

Get cold sweats just contemplating 30 straight years of mortgage payments? You ain't seen nothing yet.

Home buyers shopping for a loan may notice a new kid on the block: the 50-year mortgage.

Some mortgage lenders see the idea as an alternative to "interest only" loans and a tool to shrink those monthly obligations -- especially in high-ticket areas such as California.

"It's hard for some people to conceive this is happening," says John Marcell, immediate past president of the California Association of Mortgage Brokers. "But it makes a lot of sense. You'll be able to buy a more expensive home than you could qualify for otherwise."

But some consumer advocates and financial professionals worry that buyers who need to stretch payments over 20 more years are coveting too much house.

Read more... click here.

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