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comment by kleinbl00
kleinbl00  ·  2187 days ago  ·  link  ·    ·  parent  ·  post: Landless Americans are the new Serf Class

And 15 year loans are less than a third of all refinances let alone originations. Most mortgages are 30-year.





user-inactivated  ·  2187 days ago  ·  link  ·  

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?

kleinbl00  ·  2187 days ago  ·  link  ·  

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.

user-inactivated  ·  2187 days ago  ·  link  ·  

On the one hand, I believe you because that sounds like what a lot of other people do. On the other hand though? None of those scenarios sound even remotely like the life trajectory I'd ever imagined for myself. Especially three mortgages.

kleinbl00  ·  2187 days ago  ·  link  ·  

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.

https://en.wikipedia.org/wiki/Property_ladder

WanderingEng  ·  2186 days ago  ·  link  ·  

    Most people don't think about mortgages.

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.

user-inactivated  ·  2186 days ago  ·  link  ·  

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)
kleinbl00  ·  2186 days ago  ·  link  ·  

It discourages me every time I go to look at vehicles just how true the used car salesman cliches are.

user-inactivated  ·  2186 days ago  ·  link  ·  

I'd like to meet the person trying to get a loan for a cat. Must be a Serval/Savanah breed.