I have wanted a house for as long as I can remember. For many reasons. Because I can do what I want with it, fill it with whatever I want, invite whoever I want over for dinner, and on and on and on. To me a house is status, it's independence, but most importantly, it's control. It's worth the trade off of having to worry about maintenance and such. Each year I get older though and each year the world looks a little weirder and a little less familiar. Jobs and economy, politics and social discourse, technology. 15 years is a long time and in my eyes too long of a time to be in debt to someone. When I don't know what I'm going to look like five, ten, or fifteen years from now, and I certainly don't know what the world is going to look like five, ten, or fifteen years from now, the prospect of a mortgage seems riskier and riskier. Rising home prices don't help, because the higher the price I have to pay for a house, the greater risk I'll take if I take out a loan. 15 years is 120 months. It's 5475 days. It's 131,400 hours. Those months, those days, those hours are all filled with countless moments where your life can change in a way you've never expected. A debt like a home loan is a pretty big risk.
I remember being told that thirty year loans are designed for short term flexibility, because you're able to make smaller payments, thereby giving you more financial breathing room each month. Even though they're "thirty years" you're not supposed to hold them on for that long, they should still be payed off after fifteen years. Is that not true?
That's not true. Everyone gets a 30-year mortgage because that's the pricing model. Everyone sells or refinances because nobody lives in a house for 30 years. When they sell, they take their equity and use it for a downpayment on another 30-year mortgage. You keep doing this until the kids are whelped and you're ready to retire and then you sell the place and use your equity to live off of in a small downsized place in Tucson or Ft. Lauderdale or some shit. Or at least, that's what you're supposed to do. Now, you buy a place and have your brother or a roommate move in. And then you hope you can sell it when you need to move to another city for work. Then you need better schools so you move somewhere else but you can't carry two mortgages so you're renting your place at a loss and hoping you can find somewhere soon but now your parents are sick so they have to sell their place and move in with you and now you're all renting and it's pretty fucked up. but. In the ideal world that the lenders and real estate agents want you to believe in, no you would not pay off a mortgage in 15 years. You'd start a new one. To them, you'd ideally have started three.
Most people don't think about mortgages. Most people also don't hold them simultaneously. Carry one, sell house, pay off, get another. My wife's parents bought a house in '77. They still live in it. My wife bought a house in '00. We still live in it. We didn't for nine years but boy howdy lemme tell ya: I'd much rather have a 2011 mortgage on a 2000 purchase than a 2018 mortgage on a 2018 purchase.
Those same people are the ones who pick a cat loan based on the monthly payment and not their total cost. I'm still a bit miffed that my last car salesman used the "what monthly payment do we need to make this work" line on me.Most people don't think about mortgages.
https://www.edmunds.com/about/press/auto-loan-lengths-reach-all-time-high-according-to-new-edmunds-analysis.html The average auto loan length reached an all-time high of 69.3 months in June — up 6.8 percent from five years ago.
(June being June 2017)