Is there a 50 year fixed rate mortgage?
Answer:Yes, there is. The 50 year fixed rate mortgage has recently sprung out of nowhere and seems to be a feasible way to approach homeownership for high cost area residents. For example, in California a 50 year fixed rate mortgage perhaps will become the hottest buy - it costs as much as rent and you acquire equity in a real estate market where rents and house prices can only go up. First-time homebuyers can be particularly happy with this option given that more than 20% of California mortgages are already 40-year FRMs.
However, the 50 year fixed rate mortgage will be priced in a way that will make the monthly savings only about $90 compared to having a 30-year fixed rate loan.
Why take a 50 year fixed rate mortgage at all?
Well, savings are not the best reason to take a 50 year fixed rate mortgage. Rather, it is the chance of building equity - no matter how slow - instead of paying rent. Also, it maximizes cash flow and people could always refinance the 50-year fixed rate mortgage.
Our advice: Be sure to ask your lender about FHA loans. FHA loans have very competitive interest rates because the loans are insured by the US Federal Government. Even if you have had serious credit problems, such as bankruptcy, it is easier to qualify for an FHA loan than a conventional loan. Also, taking an FIXED rate loan while the interest rates are still low is a smart idea. Check your eligibility here:
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Common misspellings: mortage and morgage