Also, a lease provision that requires a tenant to vacate on change of ownership of the building is not enforceable. Heck, they’ve recently passed legislation in several states that confirm tenancies in the case of foreclosures of homes.

As to the higher default rate of 100-yer mortgages, since you are the one proposing them, it is up to you to show that they would have a lower default rate. You won’t be able to do this, obviously, because their default rate will be higher, not lower. Nobody will live to the full term of the mortgage, and any inheritor will be obliged to either refuse the estate (and place the mortgage in default) or accept the estate – which they won’t be doing with a building that is at the end of its’ economic lifespan. Today’s McMansions won’t last 50 years without major repairs – some new Pult homes have been declared total writeoffs after only 3 years.

Give it up – your “100 year mortgage” was a really dumb idea, just a way to guarantee that people never build up any equity, while subsidizing the dying real estate agents. 20 years from now, there will not be any such thing as a “real estate agent”, thanks to the Internet and the inability of realtors to execute any sort of arbitrage between buyers and sellers.

Ditto for mortgage brokers.

There is nothing wrong with a 25 year mortgage unless you can’t afford the payments, ditto a 100 yr. mortgage.

BTW, what study can you refer me to which shows a higher rate of default for 100yr mortgages?

As for the dogs, even if you own your home, if your dogs become a nuisance, you will end up with three choices – control your dogs, get rid of them, or move – and moving is a lot harder when you have to dispose of a house, especially nowadays.

Now what are you going to do, as a homeowner, if the neighbor decides to practice on their drums every day? You have a lot fewer avenues of complaint than if you’re a renter. Renters can get reductions in rent for the lack of peaceable enjoyment that the lease was supposed to guarantee; a very strong incentive for the landlord to intervene. As a homeowner, your options are a lot more constrained.

Also, unlike an owner, if the neighborhood deteriorates, or I don’t like my neighbors, I’m nut stuck with an unsellable asset that is declining in value daily. Ditto if my job changes. As for my statement that under the right conditions I would buy – please keep it in context … I said it would only be if the property were an absolute steal, and this means a property that came on the market because of divorce or death, and had to be sold quickly at a discout that would have all the homeowners in the area cursing. In other words, I would use the same business logic a vulture fund uses.

Long-term (the last 350 years), real estate has only kept up with inflation, so the 100-year mortgage, which gives no chance to realize equity in the owners’ lifetime (after all, the first 85 years are mostly interest), is really, really a bad idea, totally indefensible from both a macro-economic, and from a personal finance, point of view. What is so wrong about a 25-year mortgage term? The monthly payment isn’t that much higher than a 100-year term, especially if you take into account he higher mortgage insurance premium, and the higher interest rate over the term because of the higher risk of default.

When the existing and projected long term rent in my neighborhood costs more than the expected long term cost of ownership, then I will buy a house. Until that time, I will continue to rent, and sock away hordes of cash each month that will eventually be used as a down payment.

I guess where we part (or where we agree) is that one should have the right to choose their master. You choose the landlord while I may choose the bank. The problem lies with our ability to pay our master. And those that choose to assume debt unwisely (renters & owners) risk loosing their homes.

In conclusion, your statement that you would be a buyer reveals an undercurrent of belief that home ownership is not, de facto, a worse type of slavery that renting.

Also, they have the “comfort” of not being faced with $20,000 bills for remedial work to their foundation, or $10,000 for a new sewage and water line, or $7,000 for a new roof.

Also, commercial leases are not the same as residential leases. I doubt there’s a single jurisdiction that has rent controls on commercial leases, whereas there are plenty of places that have rent controls on residential properties.

Renting is not a type of slavery in today’s economy. Paying two or three times the cost of renting to “own”, and still being under-water, is slavery. After all, the debtor is slave to the lender.

The way to get some sanity back into the market is to go back to the standards of 30 years ago – 25-year fixed mortgages, no more than 2.5 to 3x annual income, and total debt load of no more than 40$ of income, including car, credit cards, personal debt, and mortgage payments.

If people can’t afford the payments on a 25-year fixed mortgage, then they shouldn’t “own” via the 100-year mortgage route. After all, one major disaster and they’re in default, and the risk is a LOT higher on a term of 100 years than on a 25-year term. In fact, the risk of a default during the term is probably 100% on a 100-year mortgage, which means that lenders will want (a) lots of security, and (b) higher interest rates.

I haven’t owned in years; I’ll become a buyer again if and when two things happen: (1) prices go below historic norms, and (2) I can get a deal that makes me look like a thief. In other words, because I purposefully sat on the sidelines during the last bubble, I can afford to wait; if someone wants to call me a “bottom-feeding vulture,” I don’t care – I’ll be laughing all the way to the bank.

Until then, I’ll continue to rent, and continue to live 100% debt-free. It lets me enjoy a higher standard of living, such as renting a 3-bedroom duplex in a nice part of town just for myself and my two dogs. 1200 square feet + indoor heated garage for less than half the cost of ownership leaves no incentive to “own” as a debt-slave.

BTW, Canada has now banned 40-year mortgages because of the extremely high default rates associated with them.

In today’s job market, owning a home is a boat anchor. It reduces mobility just when people need it the most.

Also, communities change. A house in what is now a nice, quiet community could easily be at the center of a slum in 50 years, worth nothing. You or your estate would still be on the hook for another 50 years.

Amortization terms need to be reined in, not extended. 20 years should become the new standard. Sure, this will devastate the over-inflated market, but it’s over-inflated because of lax lending, in part because overly-long amortization terms caused people to focus on the monthly payment.

As for keeping people in homes they can’t afford, let’s not fool ourselves – that doesn’t work. Either the loan gets modified, or the house gets repossessed, and the bank eats the loss. Either way, the home is now available at its’ true value. Attempting to keep people in houses they can’t afford is a case of trying to solve a debt problem with more debt. You can’t borrow your way out of debt.

Also, renters CAN build equity – just by another name – assets. They can take the money they save by renting and invest it in something that will appreciate. Or they can stash it in the bank, or even in their mattress. In all those cases, they’ve built up their net worth, and increased their “equity” in themselves.

Think of it – who has more “personal equity” – someone with an under-water mortgage and other debts, or someone who, because they rent, is able to clear out their debts, live debt-free, and has a few dollars in the bank. The home debtor is a slave. Your 100-year mortgage scam (it is a scam, since it hurts those who you think it would help, even if that wasn’t your intention) will just extend that slavery to another generation.

Here’s another thought– if a person could “own” a house at a renter’s rate (assuming the 100 yr amortization brings the monthly cost down to rental rates), people who would otherwise rent would buy on these terms and the cost of rentals would drop because of lower demand and higher supply. Possible?

And even if the rental prices did not drop, the chance of building equity would be worth it, since renters can NEVER build equity.