Witness The End of The American Dream
Americans are living in unprecedented times. Remember when the U.S. auto industry sold automobiles that could be purchased on a five year payment plan. If you were really careful with your finances, you could pay it off in three years. Weren't those the times?
Fast forward to 2006. Now many vehicles are so expensive that Americans are being offered six, seven and even eight year loans to pay for a vehicle. It is highly possible that this vehicle could be sitting in a junk yard and you will still be paying for it. The automobile industry does not want you to think about this though. They just offer you incentives to get you into newer vehicles. They say that if you trade in that used car, they will pay off your loan for you no matter how much you owe. What they are not telling you is that they are adding what you owe on the old car to the loan for the new vehicle they want you to buy. They are not actually paying your old loan off, they are just adding to it.
Doesn't the American Dream consist of owning a home? I think it does. It has been common knowledge that it takes many Americans thirty years to pay for that house. What the banks do not like focusing on is that you pay three times the price of the house once the home loan is actually paid off.
The last nail in the coffin that the American Dream is being buried in is the new 50 year mortgage that lenders are offering consumers. That is right I said 50 years, it was not a typo. Now that $250,000 home after interest will cost you upward of one million dollars. That's right, interest is calculated annually and you are now adding another twenty years worth of payments.
The 50 year mortgage is being offered simply because people cannot afford to buy a house in 30 years anymore. Normally, the housing market would top out and prices would adjust back to a price range that people could afford. The new 50 year mortgage will allow the price of houses to continue to rise. This will allow people selling houses to continue to increase their profits. Lenders will still be able to make more home loans and their stock prices will continue to rise.
The only one who has nothing to gain by having a 50 year mortgage is the new home owner. Let's say that you save your money for a down payment. You are 27 years old and you are ready to buy your dream home. Fifty years from now you will own your home. You will be seventy seven years old. Now you can start really saving for retirement. It is more than likely that your retirement will be delayed until after your house is paid off. This will ensure that you cannot retire until you are almost 80 years old. What is important to remember is that many of us never live to be 80 years old. This means there is a good chance that you will never be able to retire. You will doe and your children will be forced to either let the bank keep the house or finish paying for it for you. If your children are paying for their own vehicles and their own house, there is a chance that they will not be able to continue paying for your house. At the least it will be a burden that you leave to your children.
If you do not make it to age 77, you will have worked your whole life and never have lived the American Dream. Even if you were able to start buying a house at are 20, you would still be 70 years old when you actually own it. On top of that you will have to have saved enough money to live through your retirement years.
This new 50 year mortgage is the end of the American Dream as we know it. It all but guarantees that you will have to literally work yourself to death to have a home to call your own. This might be something to think about when you are offered a 50 year mortgage.
Fast forward to 2006. Now many vehicles are so expensive that Americans are being offered six, seven and even eight year loans to pay for a vehicle. It is highly possible that this vehicle could be sitting in a junk yard and you will still be paying for it. The automobile industry does not want you to think about this though. They just offer you incentives to get you into newer vehicles. They say that if you trade in that used car, they will pay off your loan for you no matter how much you owe. What they are not telling you is that they are adding what you owe on the old car to the loan for the new vehicle they want you to buy. They are not actually paying your old loan off, they are just adding to it.
Doesn't the American Dream consist of owning a home? I think it does. It has been common knowledge that it takes many Americans thirty years to pay for that house. What the banks do not like focusing on is that you pay three times the price of the house once the home loan is actually paid off.
The last nail in the coffin that the American Dream is being buried in is the new 50 year mortgage that lenders are offering consumers. That is right I said 50 years, it was not a typo. Now that $250,000 home after interest will cost you upward of one million dollars. That's right, interest is calculated annually and you are now adding another twenty years worth of payments.
The 50 year mortgage is being offered simply because people cannot afford to buy a house in 30 years anymore. Normally, the housing market would top out and prices would adjust back to a price range that people could afford. The new 50 year mortgage will allow the price of houses to continue to rise. This will allow people selling houses to continue to increase their profits. Lenders will still be able to make more home loans and their stock prices will continue to rise.
The only one who has nothing to gain by having a 50 year mortgage is the new home owner. Let's say that you save your money for a down payment. You are 27 years old and you are ready to buy your dream home. Fifty years from now you will own your home. You will be seventy seven years old. Now you can start really saving for retirement. It is more than likely that your retirement will be delayed until after your house is paid off. This will ensure that you cannot retire until you are almost 80 years old. What is important to remember is that many of us never live to be 80 years old. This means there is a good chance that you will never be able to retire. You will doe and your children will be forced to either let the bank keep the house or finish paying for it for you. If your children are paying for their own vehicles and their own house, there is a chance that they will not be able to continue paying for your house. At the least it will be a burden that you leave to your children.
If you do not make it to age 77, you will have worked your whole life and never have lived the American Dream. Even if you were able to start buying a house at are 20, you would still be 70 years old when you actually own it. On top of that you will have to have saved enough money to live through your retirement years.
This new 50 year mortgage is the end of the American Dream as we know it. It all but guarantees that you will have to literally work yourself to death to have a home to call your own. This might be something to think about when you are offered a 50 year mortgage.
posted by Superman @ 5/11/2006 01:51:00 AM
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