The Wisdom of a Half-Century Committment
Today’s Tribune features an editorial about the mindset of locking yourself into a 50-year mortgage. That’s right: 50 years, i.e. 600 payments. As the article points out, for the average homebuyer, that means you’d pay it off just in time to shop for a retirement home.
The point of the piece isn’t that you need to plan ahead 50 years, but that if the only way you can afford to buy a home is to spread the payments out over a half-century, then maybe you should think twice. It’s part of a growing sentiment that creative mortgage vehicles, whether exotic interest-only adjustable rate loans or lifetime committments like this one, are a big part of the reason that the housing market is at a crossroads. Many people have convinced themselves that they must buy a home at all costs, even when they can’t really afford it, and find themselves in financial straights later if they property’s value doesn’t appreciate rapidly enough. Remember, the feeling of comfort from a new home doesn’t just come from its physical qualities, it also comes from the financial security of a good investment.
