All……was walking by the plumbers installing a water heater and ask if it was a pretty good one and they commented “it will probably last 10 to15 yrs”. got to thinking about all the items that would be replaced in that 32 yr mortgage .Carpet ,paint, shingles , water heaters etc. and your still paying for the orignal plus intrest. Then theres the wall receptical @ $1.00 plus, that gets rolled into that 32 yr loan, the list just goes on.
I was wondering if any of the “numbers” people around here had or heard of any subs ,as plumbers financing there own portion of the build and what advantage a short term fininacing agreement would have on the over all costs?
I just reminded myself that I have to get door stops Monday ,wonder if the home owner would be interested in buying them out right and I can deduct them from the trim package price ? Iknow this is a small item but I hope you can see where I’m going and can make some comments.
Replies
i don't know if this is what you're asking
....but the union built homes in Dupage County and other surrounding areas have an additional 5 years of warranty on the workmanship..
..basically the homeowner pays for parts in the 5 years after the original warranty expires. by just filling out a simple registration when they move in...and I think it is transferable
Your argument only holds water if the original mortgage holder is there for the entire first mortgage.
I have encountered very, very few people that want to actually pay for something that will last longer than the next owner.
Decorating trends rarely last the length of the loan. Today's stainless and granite style will pass just like avocado fridges and butcher block laminate.
If you want a long lasting roof, go metal. Just try and sell someone on the 4x plus higher initial cost of the metal compared to architectural shingles that won't last 30 years and will need to be torn off and disposed of before the next shingle roof.
If you want a long lasting and efficient water heater, go tankless, but again, the initial cost is much higher than a 6 year warranty tank.
Value doesn't sell in a throwaway society.
First I have never heard of a 32 year mortgage, and will add that I've probably had 10 mortgages in my lifetime. I get your point though and it's a novel idea.
The idea though is to deliver a house at an affordable price, meaning buyer can afford the mortgage payments. Sure a 30 year water heater, 50 year roof, and a lifetime siding can be installed (also know as brick) but at some point the house becomes unaffordable.
As far as subcontractors etc being in the loan business, I doubt that you will find any. As far as short term bank loans to pay for some of the house, well, yea, maybe, but generally a loan has to be secured with collateral. I don't think a used water heater would do it...
Most anyone who has gotten a mortgage has been shocked by how much the house (principle + interest) costs over the lifetime of the loan. The thing is that 95% of home buyers don't think in those terms. Their main financial consideration is can they afford the payment. Part of a realtor's's selling strategy is often that a a $1000 mortgage payment sounds like a lot of $$ now but in 10 years from now you will be making more money and the $1000 will sound like a great deal. When I assumed my parents finances after their passing, the $190 mortgage payment was almost a joke. I think I paid off the last year just to save on stamps (but more so my time).
Have I missed your point?
"As far as subcontractors etc being in the loan business, I doubt that you will find any. As far as short term bank loans to pay for some of the house, well, yea, maybe, but generally a loan has to be secured with collateral. I don't think a used water heater would do it..."The whole house could still be the collateral. It would just be another lien against the property.The only way that it would work would not be to do this by trades, but rather by expected lifetime. So there might be a 30 yr first, 20 year 2nd mortgage, 10 year 3rd, and 5 year 4th.However, the 3rd and 4th would be way down on the totem pole and thus would have higher risks and interest rates.All together that would heveally load the expenses into the first few years. And many buyers, specially first time buyers are already strapped as it is.Then if the house is refi or sold with a new mortage how do you put all of the stuff into new stagger mortgages? I think that would be a nightmare.A different option would be to rent. I know a few utilities (and possilby some sales/service companies) rent WH and maybe also furances/AC.