When surfing the Internet last evening, I was looking around at
the going mortgage interest rates to see how the 15 year rates
were doing.

I couldn't help but notice the links for 40 and even 50 year mortgages that
were listed on one site I visited. 50
year mortgages, yikes! I realize that
times are tough and some folks are
having difficulties making their
mortgage payments, especially those
with adjustable rate mortgages that
just went up by 2% or even more. But
the topic of this article isn't that,
nor the ever increasing foreclosure
rate.

It is about a new mortgage tool that
has been created under the guise of
helping out borrowers. Why a guise
you ask? Well what mortgage lender
isn't happy to take another 20 years
worth of interest payments from you?


If you are considering a 50 year mortgage, it is not smart thinking for
anyone who ever wants to retire and
spend their golden years free from the
claws of their monthly mortgage
payment! Oh sure, everyone is living
longer these days. Why not a 50 year
mortgage if you're going to live to be
100 anyway?

I'll tell you why not! Folks need to
be able to enjoy retirement with
limited monthly expenses. Sure if you
own your home free and clear, you have
to pay real estate taxes and homeowners
insurance. But, at least you won't
have that payment that for some of us
is nearly half of our monthly income in some cases - thanks to the
evolution of automated underwriting.
Let's not go there though as that is
another sore subject to me.

There is something key about 50 year
mortgages you may not know about.
Getting a 50 year mortgage may not
change your payments all that much.
Did you know if you get a $150,000
mortgage for 30 years at say 6.5%, the
payment is $948/month. The same mortgage for 50 years at 7.0% (hey the
rate is always going to be higher the
longer term you have), the payment is
$905/month. That is a savings of $45.00/month! That is all! Not much
for adding 20 years to your loan is it? Cutting out that coffee stop every
other day on the way to work would
more than make up that amount!

If you have a 50 year mortgage, chances are you may not keep it all 50
years, but your principal balance will
be higher than it would otherwise be
when you do sell or refinance it. If
you DO keep it all 50 years, you'll
have paid 20 more years if interest
and probably work 20 more years than
you want to. Doesn't it get tiring
working just to pay the bills? Unless
your income level far exceeds your
taste in homes, chances are you live
like many Americans, with very little
left to put in savings to show for all
the hard earned money.

My viewpoint on all this is exactly why I was looking at the 15 year
mortgage rates. I just celebrated, albiet quietly, my 50th birthday and
would really like to at least have the
option of retiring when I'm 65. If I
refinance my mortgage now to a 15
year mortgage I will own my home free
and clear in 15 years. Granted the 15
year payment is higher, but if I just
cut out those weekend dinners out and
tell my kids no to the newest, latest
fashions, I will have enough to make
up the difference. Then instead of a
flickering match, there will be that
light at the end of the tunnel to look
forward to in 15 short years!