Gret Uttal, president of Cyberlink Software Solutions, has been in the mortgage industry for more than 40 years. He said it’s not the first time the idea has been floated. He said the important thing a 50-year mortgage would allow is bringing a new wave of customers into homeownership.
“Anyone buying with a 50-year mortgage most likely will not hold the house forever,” Uttal told Mortgage Professional America. “A 50-year mortgage is a stepping stone to bigger and better things. Like many other mortgage products, a 50-year mortgage would be one more option to get into the home ownership game sooner rather than later. I believe it is a good thing.
“Can you imagine if we had 50-year mortgages when rates were in the 3s. Anyone who had a 50-year mortgage would be happy they borrowed when they did. Buying a house is not about timing the market. It is about getting in on the ground floor of home ownership.”
Uttal feels that once those borrowers are in the market, there will be options like refinancing and extra payments that can help them shorten the term.
“Buy now, borrow with an interest-only loan, ARM, GPM, combo 1st and 2nd, just get in the market if you can afford the payments,” Uttal said. “Once you are in the market, you have the potential for appreciation, refinance if rates come down, make larger monthly payments if your income goes up, tax advantages and more. Many lenders will let you set up a bi-monthly payment, which is another way to lower the interest costs.”