All that'll do is perpetuate the housing bubble. If 40 year mortgages were available, and the interest rate was a quarter of a percent higher, it would translate to buying roughly 10% more, co.pared to a 30 year mortgage.
People would just spend more on buying homes and the problem wouldn't go away. In fact, it'll get worse because a lot of people will have even less equity in their homes.
If government really wanted to decrease the rate of foreclosures, they should
- Decrease the maximum loan term to 15 or 30 years
- Increase the minimum down payment for loans
- Set a limit on how much local governments can tax residential real estate
None of that will ever happen, of course.
All that'll do is perpetuate the housing bubble. If 40 year mortgages were available, and the interest rate was a quarter of a percent higher, it would translate to buying roughly 10% more, co.pared to a 30 year mortgage.
People would just spend more on buying homes and the problem wouldn't go away. In fact, it'll get worse because a lot of people will have even less equity in their homes.
If government really wanted to decrease the rate of foreclosures, they should
- Decrease the maximum loan term to 15 or 30 years
- Increase the minimum down payment for loans
- Set a limit on how much local governments can tax residential real estate
None of that will ever happen, of course.
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