I can think of a couple reasons older folks might take out a 30 year loan (assuming they can afford the payments into retirement) if they could snag a choice property:
#1 Home equity has special protections, for example, if one spouse has to go into a nursing home, the other spouse can keep the home while qualifying for Medi-care to help pay the nursing home costs. This isn’t all rosy, there’s a man in my dad’s nursing home for alzheimer’s, his wife “gets” to keep the house, unfortunately, it’s two hours away, so this old lady has to drive 4 hours round trip to see her husband. The downside of this benefit is that she can not sell the house to move closer to the nursing home because once the equity is freed-up, her husband will be disqualified from medicare and they can’t afford the nursing home for long. He has violent outbursts (like most Alzheimer’s patients) and he could hurt her. This is a couple with very modest means.
#2 Heirs can inherit a house valued at the current market value for estate purposes – in other words, your heirs can inherit at the stepped up value which usually has great tax advantages. BUT the biggest windfall is that your heirs also inherit YOUR Prop 13 property tax rate – making it possible for your heirs to benefit from the long-ago purchase and quite possibly make it possible for one of your heirs to keep the house (if they can continue to pay the mortgage payments that are left behind due to the 30 year loan).
