Will We Never Learn . . The Next Housing Crisis?

[flintauqua]

Why are the quasi banks and other lending institutions advertising 50, that's right 50 year refinance mortgages? 

Do they not teach the power of compound interest and the net present value of investment in school anymore?

Let's see, you refinance your home with a $100,000, 5% 50 year loan.  Your monthly payment will be $454.14, not bad.  Better than the $516.13/month on a 33 year, 5% loan.

And to save $62 dollars a month, the price of McDonalds and a movie for a family of four, what have you done. 

You've added $68,000(nominal) to the cost of that house.  That's how much more interest you just obligated yourself to pay to whomever ends up holding your mortgage over the 50 years instead of 33. 

Now, the worst part.

Say you decide to sell your home after 10 years, after you have paid the mortgage holder $54497 in monthly payments.  Guess how much you still owe on that $100,000.

$93,791

When will we learn?

[Dee Gee]

Some people never.  This is why I always paid more then the stated amount on a loan thereby paying it off early and saving the interest. 

[Jo McDonald]

If you refinanced for 50 years -- chances are you would NEVER get it paid off.  Depending when you first made the mortgage - your age -
how many years you had already been making the payments, you will get to the non working time of your life and will not have the funds to make the payments, so you will definitely be on the proverbial "creek without a paddle". 
  You would have to buy and mortgage your first home when you were 12 or 14 in order to have it paid off.  Jeepers, seems the worst disease
there is now days is Utter Stupidity.