I skimmed through that whole multi-screen article, and the only thing I saw about the mortgage term was
I'm not going to dispute which came first, because I don't know the answer. But there's nothing inherently evil about a 30 year term. I chose it specifically because I believe that over those 30 years (or however long I live in my home) my interest rate will be made so small due to inflation and rate increases that I'll make out like a bandit over that time. It's a gamble, but no more than investing in equities or bonds.
The advent of the 30 year mortgages popularity has not been kind to the finances of the yuppie and baby boomers. It locked them into debt for too many of their prime earning years. 15 year mortgages made more sense until corporate banking greed decided it was better to stretch the financial bondage twice as long as what used to be a healthy norm. ....
Don't read so fast!
"The FHA also started the trend of qualifying people for loans based on their actual ability to pay back the loan, rather than the traditional way of simply "knowing someone." The FHA lengthened the loan terms. Rather than the traditional five- to seven-year loans, the FHA offered 15-year loans and eventually stretched that out to the 30-year loans we have today."
One word. Lobbyists.
Don't think for minute our guvmint acts on its own
And if you get a really low rate, not paying it down at all.... I do not see rates being this low 5 or 10 years from now... so the market will be paying you a higher rate than you owe....
That's why I'm on the fence about paying off our 4 1/4% 30 yr loan. My original thought was to pay it off in about 2 years, but not sure yet. On one hand it would be really nice not to have the mortgage, but on the other hand, I'd sure hate to take that much out of my savings and in reallity, there's a fair chance to earn a better return on the money than I'd save by retiring the mortgage.
And the problem is that if you pay it off now and rates do go up a lot..... you have no way of getting your low rate back...
I have a low rate 15 year and plan on taking all 15 years to pay it off...
+2 (14 years left @ 2.5% fixed)And the problem is that if you pay it off now and rates do go up a lot..... you have no way of getting your low rate back...
I have a low rate 15 year and plan on taking all 15 years to pay it off...
And the problem is that if you pay it off now and rates do go up a lot..... you have no way of getting your low rate back...
I have a low rate 15 year and plan on taking all 15 years to pay it off...
Interesting question. My take would be that you can't charge interest on the loan because it wasn't a loan, but rather a gift.OK ...so son is closing in a week ...we gifted him enough to avoid PMI ...he'll be paying back, though. How best to structure the loan? Can I set it up some way to maximize his tax deduction opportunity? All interest and then "forgive" the loan when the total amount is paid back?