There is a new article posted in the UT today about how with the reintroduction of the 30 year bond banks will now begin offering 40 and 50 year mortgage products. Although a farcry from the multi-generational mortgages previously seen in Japan this is an attempt to squeeze out any affordability left in the market. See here…
I’m not good with the Amort calculator, but what effect do you believe this will have on the affordability vs. current IO-type loans and how may that translate to propping up prices in the short term? Is this a last ditch effort to keep the party going by spiking the punch one more time?
Check out housingbubblecasualty.com. SoCalMtgGuy, who runs this site, wrote an article a few weeks ago, showing that the payment on a 40 year is only slightly lower than it would be for a 30 year. I think those loan products are too much hype, and they won’t raise your affordability as much as the ARMs, I/Os and neg-ams did. Maybe SoCalMtgGuy can write an article about this – ask him. He knows a lot about loans.
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