Is the 50-year mortgage next?

The Chicago Sun Times reports that “… more and more lenders are offering 40-year mortgages with some even considering a 50-year product for the first time.” The longer the payback period, the lower the monthly payment, so longer mortgages help-first time buyers get into the market by qualifying for a loan.

The Times says that”…a key development has been the U.S. Treasury Department resuming 30-year bond sales earlier in the month …. brokers report that the return of the 30-year bond has given lenders a better measuring stick of what to charge home buyers for a 40-year mortgage.

This may be even worse than an interest only loan because you think that you are making payments to principle when in fact they are so small that most of your money goes to interest.

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