50 Year Mortgage

Daily Real Estate News | August 25, 2006

50-Year Mortgage Offered, But Far from Popular

Statewide Bancorp, a Rancho Cucamonga, Calif.-based lender, is among the first in the country to offer 50-year mortgages, writing $92.1 million worth of such loans in five states during the second quarter.

Wells Fargo, Countrywide, and other large lenders, however, do not plan to make 50-year mortgages available — at least not as long as financiers like Fannie Mae and Bear, Stearns & Co. refuse to purchase them on the secondary market.

"This is not a product that has been taking the world by storm," says Mortgage Bankers Association chief economist Doug Duncan. "From a statistical perspective, they are practically nonexistent."

While critics complain that consumers who take out 50-year loans will pay a staggering amount of interest over the life of the loan while receiving only a negligible drop in their monthly mortgage payment, advocates point out that most 50-year products are adjustables with a fixed rate in the initial years and that borrowers likely will sell their homes before the variable-rate period kicks in.

Source: News-Press(Fla.)(08/24/2006)

Browse all of today's news