The 30 year mortgage was a mistake now 50? Lol so most home buyers won’t start paying down the principle of the loan until 35 years into the mortgage?! Banks are so turned on by this idea. Even more so with American having a massive economic downturn every 5 years.
I also worry home prices will jump to eat up any monthly cost differences, too. Like okay your 50 year mortgage is $100 less a month but we increased the price of the house by $50000 so unless you’re already a homeowner (and plan on renting next) then you’ll be further priced out of the market.
That’s the whole point. This doesn’t affect institutional purchasers because they pay cash most of the time. It ONLY hurts individuals.
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Nice, you just buy a house when you’re 10 years old and you’re good to go
You know what you need to get mortgage? A job.
Time for those 10 year olds to put their little hands to use in the new electronics factories and start earning their living!
I’m thinking we’ll probably start interning children around 5 or so–that way they can really ‘hit the ground running’ when they reach 10. 5 years experience before starting their first career! If only I had been given a headstart like that!
Or, raise the retirement age to 75
I just assume that I’ll either die as a casualty in the worlds dumbest war, or in a workplace accident once the idiots in charge fully dismantle the federal government and my boss no longer needs to listen to osha.
Or the Fedbois come for my family.
Retirement seems kinda like a pipe dream.
How many 25 year olds are out here buying houses
Awesome thing to do in a country where life expectancy has been falling year after year and is currently 78.4 years
Enjoy those 3.4 golden years
At the current prime rate of 7%, changing a loan from 30 years to 50 would reduce payments by less than 10%. Just a terrible idea.
Shit, even at historic lows of 3% interest it only drops the monthly payment by about 25%, but increases the total cost of the loan by 80%.
Its absolutely a terrible idea.
How many years would a loan have to be before it would just be considered rent? Is that the plan? Never let anyone own anything, just keep paying “rent”?
The amortization length affects proportion of principle paid down, but it doesn’t eliminate it entirely. At the same interest rate, you end up having paid more in interest at maturity of a longer amortization, yes. In practice, this can be mostly mitigated by negotiating a lower rate, or negotiating and exercising prepayment privileges.
More importantly, with a mortgage, ownership of the property is yours entirely, from day one, not the lenders’. What you owe is cash, not the property. The property is merely collateral in the event of default of payment.
BTW, multi generational loan agreements are not new. They are somewhat common historically and in other places of the world. For the same reason that multigenerational housing is the historical norm.
Doing this with baloon frame mcmansions built by shady developers in dubious places with undocumented workers and you have a recipe for insurance claims and foreclosures.
But won’t the rate be higher, like 30 year rates are higher than 15 year rates? I don’t know much about economics but I remember that being a thing when I was looking at mortgages. I assume it has to do with long-term risk for the lender.
Also, how many people actually stay in a home for 50 years without moving? I know my earlier house payments had a larger portion going to interest (I assume this is a math thing?) than my more recent payments, therefore you build equity really slowly at first, meaning you’re not building enough equity to even cover the costs of the ownership or the cost to sell unless you stay in place for a long time.
I’m just a dummy but this feels like a scary thing and not a good thing.
I’d think of it more as a way to lock in housing costs, rather than a way to buy a home. For example, I bought my condo 5 years ago. My apartment rent was say $2200/month including fees. My condo was $2000/month including fees, with a 15-year mortgage.
Five years later and my old apartment is listed for $3100/month. My condo is only $2200/month (fees went up).
I expect the spread to get worse over time.
Edit: not sure the cost would be lower enough monthly to justify the extra interest, but maybe there’s an edge case where it makes sense?
Why stop at 50? Let’s start multi-generation mortgages. You can pass down your debt to your loves ones for them to remember you by
Can they stop being so ridiculous that this woman has a chance to make sense? God,at the beginning of a 30 year mortgage, you are already paying mostly interest. Cut some of the principal off and now you are paying a couple hundred bucks less at most. Will they offer lower interest rates or will they jack up 30 year interest rates?
This is Trump we’re talking about here. He will make this as self-serving as possible if it should even come to fruition. It will also be the absolute worst deal for anyone gullible enough to get on board. Think about these 10-year car loans and the like…people are taking them.
Do we even expect a modern house to still be intact in 50 years? Hell, can anyone expect to survive 50 more years the way things are going? Shit, maybe i will get in on this after all, lol
Interest should be illegal
The end result of this is everyone buys homes and cars in cash or they just invent something that is interest without calling it interest. They have that for certain religions who have a faith-based objection to interest. It seems dumb to me, but apparently structuring it with the interest rolled into the principal and called something else makes god happy.
To add to this: Christianity was one of those religions and it’s the major reason why there are so many Jewish bankers. Jewish families were well-established in the industry long before Christians figured out there was money to be made in banking and loosened the rules
Dumbest idea in here.
Why is that?
The law of unintended consequences says that this will just result in more douchebags buying $3 mil houses because they can “afford the payments” and plan on dying before they ever fully pay it off.
The con of extended loans is so well known. 🫠
The Federal Housing Finance Agency (FHFA), led by director Bill Pulte, confirmed that United States President Donald Trump’s administration is actively working on a proposal to offer home buyers mortgages with repayment terms of up to 50 years. Pulte described the plan as ‘a complete game changer’ in a post on X.
Shoddy McMansion wealth hoarder nepobaby says what?
Average first time home buyer age is over 40 atm. So, banks guns go fer that?
Yeah its basically free money. Someone pays rent and they take the house for resale when they die or cant pay.
We live in a coast-to-coast slave plantation.
