"On Sunday, FHFA Director Bill Pulte responded to the backlash with this post: We hear you. We are laser focused on ensuring the American Dream for YOUNG PEOPLE and that can only happen on the economic level of homebuying. A 50 Year Mortgage is simply a potential weapon in a WIDE arsenal of solutions that we are developing right now. STAY TUNED!"
"Traditionally, the longer the amortization, the higher the mortgage rate, said Mohtashami. Looking at the difference between a 20-year mortgage and a 30-year mortgage, the best-case scenario for a government-backed 50-year loan product would put rates most likely between 0.42% to 0.57% higher than a 30-year fixed mortgage. Using the 30-year fixed mortgage rate at the close on Friday of 6.32%, you could be looking at mortgage rates of 6.74%-6.89% for a 50-year loan."
"In a social post on Saturday, President Trump floated the idea of a 50-year mortgage to boost housing affordability, but the idea got a frosty reception online. One reason is that stretching the loan term out that long ends up costing much more in interest over the life of the loan while only shaving a few hundred dollars off the monthly payment. You also have to factor in a higher mortgage rate than what you get with a 30-year fixed loan."
President Trump floated a 50-year mortgage to boost housing affordability. Stretching the loan term to 50 years increases total interest paid substantially while only shaving a few hundred dollars off monthly payments. A longer amortization typically carries a higher mortgage rate; a government-backed 50-year loan could have rates about 0.42% to 0.57% higher than a 30-year fixed. Using a 30-year rate of 6.32% implies a 50-year rate near 6.80%, producing only modest monthly savings but much larger lifetime interest costs. Fannie Mae payment calculations in the examples reflect principal and interest only, excluding taxes and insurance.
Read at www.housingwire.com
Unable to calculate read time
Collection
[
|
...
]