50 Year Mortgages

Quote: Gandler

How would 50 year bonds be a good thing? And, why would 50 year mortgage accelerate their release even if they are?

They would lock in lower rates for 50 years, they would not have to be refinanced for 50 years. That is how.

Mortgage rates are tied to bond rates. If you started making a market for 50 year paper in mortgages bonds could more easily follow.

Quote: SOOPOO

Let’s say I agree with your ‘niche’ characterization. Why can’t there be a financial product available to those that fit in that ‘niche’?

As far as how many doctors go elsewhere after residency, it’s around 1/2. The stats available are only by state, and 57% stay in the same state.

But isn’t the whole idea of a mortgage that the house is collateral for the loan? How can you expect a lending institution to just allow you to change the collateral you are putting up to secure the loan without the new house being appraised at an equal or greater value? If that is included in a ‘portable’ mortgage, that would make sense to me.

There are plenty of ‘bad’ mortgage options already available. Some variable rate options are time bombs. So are some ‘bubble mortgages’. And let’s not forget about high ‘points’ to give you a falsely lower ‘rate’.

For present mortgage, I told all the brokers do not even send me a quote if it included points. Then there is the ‘mortgage origination fee’. Most of the brokers quoted around .2%, which is around $1k. I found one guy who said that is the biggest BS. He said he makes enough money to not charge one. So I used him. Got 1/8% less than any other offer, no points, no mortgage origination fee.
Point being I didn’t need the government to help me. On an unrelated note, my mortgage has been sold twice in the year I’ve had it.

If the niche was big enough, I;m sure a banker or two would've already come up with innovative ideas to serve it. Maybe give resident MDs an interest only loan for the duration of the residency, with the monthly payment increasing once the real money comes in?

IF we allow portable mortgages, we'll need to throw out the current way we do things with mortgages and come up with new ways of doing mortgages. For example, with a portable mortgage, portability only allowed if certain underwriting criteria are met-loan to value, clear title, etc. Which means an appraisal, title research. etc. Not as asimple as just moving the lien over from one property to the next, but possibly more easy than having to apply for a new mortgage. As for banks not being able to sell the mortgage as mortgage backed securities? Oh well.

I also kept a hard line and drove a hard bargain on my mortgage. Had a more than 20% down payment and had all the time in the world to wait for the best offer. On the day of closing, the bank (I forget the originator) included a disclosure that they were going to sell the loan to Countrywide, which they did. Then Countrywide went under and Bank of America bought the company and my loan.

As for not needing the government to help you, if you mean you didn't need any financial assistance with first time home buyer programs or other forms of government largess, good for you. A testament to your hard work and upward mobility. But you certainly benefited from government regulations intended to promote truth in lending so you,as the consumer, didn't get screwed by a cheating or thieving lender, and the lender didn't get screwed by a cheating or thieving consumer. Transparency in plain language is good, It is a nice thing, and nice things cost money.