50 Year Mortgages

In what I assumed could not happen, Trump proposed two changes to traditional mortgages, one is actually decent, one is probably the most foolish housing policy in modern history.

Decent- Portable mortgages. This will allow people to move their mortgage to a new property (within reason, obviously you could not move a 800k mortgage to a 200k property for example, and there are definitely complications and limitations, so it is not all roses.) But, overall this could be a good proposal if implemented properly.

Terrible- 50 year mortgages. And, this is the one Trump is heavily pushing, even posting memes of himself comparing himself to FDR (not joking, see below.) This will destroy the housing market. Most people will have almost no equity in their home, and will be paying mostly interest for many years (and the interest rate will be higher than a 30 year mortgage.) You may as well be renting from the bank.

This is basically good for banks and builders, and terrible for homebuyers, so it is right up Trump's alley.

Kamala wanted to build 3 million new dwelling units, and provide $25K down payment assistance to 1st time homebuyers. But, hey, good luck that 50 year mortgage to go along with that 6 to 8 year car loan. Have the day you voted for!

Look at all the fake, air brushed hair that the oaf just HAD to add to his mug shot.

Old, balding, embarrassing: the MAGA trifecta!

Quote: GenoDRPh

Kamala wanted to build 3 million new dwelling units, and provide $25K down payment assistance to 1st time homebuyers. But, hey, good luck that 50 year mortgage to go along with that 6 to 8 year car loan. Have the day you voted for!

If Kamala wanted to build houses she should have become a developer like Trump.

I do not like the idea of "portable" mortgages. Too much risk on both sides. New underwriting needed.

50 year mortgages are common in places like Asia. All that is happening is you are taking slightly more than an interest-only product. Almost rent-to-own with interest as the "rent" portion. I would not take one, but I can see why some people would.

Quote: AZDuffman

I do not like the idea of "portable" mortgages. Too much risk on both sides. New underwriting needed.

50 year mortgages are common in places like Asia. All that is happening is you are taking slightly more than an interest-only product. Almost rent-to-own with interest as the "rent" portion. I would not take one, but I can see why some people would.

This is not something (50 year mortgages) I’d want our government to outlaw. As long as the terms and consequences are clear, let a consenting adult decide what kind of financial product they want. Is it smart for most homebuyers? No. But it might have made sense for me in days gone by. Just started residency. Want a house for more than I can afford the payments on a 30 year mortgage NOW. But can get the house I want with the lower payments a 50 year offers. Start my career, make bigger payments and pay it off when I want to.

Now ENCOURAGING 50 year mortgages is not something I want our government to do, either. Let customers and financial institutions decide.

My new mortgage is 15 years. After 1 year, around 1/2 my payment is principal. Not bad.

Quote: SOOPOO

This is not something (50 year mortgages) I’d want our government to outlaw. As long as the terms and consequences are clear, let a consenting adult decide what kind of financial product they want. Is it smart for most homebuyers? No. But it might have made sense for me in days gone by. Just started residency. Want a house for more than I can afford the payments on a 30 year mortgage NOW. But can get the house I want with the lower payments a 50 year offers. Start my career, make bigger payments and pay it off when I want to.

Now ENCOURAGING 50 year mortgages is not something I want our government to do, either. Let customers and financial institutions decide.

My new mortgage is 15 years. After 1 year, around 1/2 my payment is principal. Not bad.

Most people are idiots, especially with money. Same reason there are 8-12 year car loans now... Americans will see a slightly lower monthly payment (it's really not that much lower when you look at the increased interest, probably safe to assume at least 1% more.)

For example a 400k house, a 50 year mortgage will lower your payment about 275 a month. And in exchange, you get to pay twice as much interest over the course of your life. So you are basically doubling your payment to the bank, in exchange for a tiny difference in monthly payments.

Governments don't outlaw it, but they need to approve it (just like they did with the 30 year,) at least for traditional mortgages. And, I don't see any reason to design a way to approve 50 years. This is not good for buyers, borrowers, or housing availability. This is only good for sellers and banks...

Quote: AZDuffman

I do not like the idea of "portable" mortgages. Too much risk on both sides. New underwriting needed.

50 year mortgages are common in places like Asia. All that is happening is you are taking slightly more than an interest-only product. Almost rent-to-own with interest as the "rent" portion. I would not take one, but I can see why some people would.

If new underwriting is needed for portable mortgages, too bad. Lenders will just have to adjust.

Quote: SOOPOO

This is not something (50 year mortgages) I’d want our government to outlaw. As long as the terms and consequences are clear, let a consenting adult decide what kind of financial product they want. Is it smart for most homebuyers? No. But it might have made sense for me in days gone by. Just started residency. Want a house for more than I can afford the payments on a 30 year mortgage NOW. But can get the house I want with the lower payments a 50 year offers. Start my career, make bigger payments and pay it off when I want to.

Now ENCOURAGING 50 year mortgages is not something I want our government to do, either. Let customers and financial institutions decide.

My new mortgage is 15 years. After 1 year, around 1/2 my payment is principal. Not bad.

Key word is if the terms are "clear." Are the terms clear to the majority of the public?

Is there some reason there is an advantage to letting some people become prey to unscrupulous people? Just makes the unscrupulous more successful. That's not what I want to encourage. Imagine if you were allowed to leave patients confused and not understand the full risks of anesthesia, just so you could make more money perhaps.

OTOH, if someone fully understands what they're getting into, they learn the lesson they already understood to be what they might expect.

Something like when they started putting the full clear warning on cigarette packs. Go as far as reasonable to make things clear to people.

Quote: AZDuffman

If Kamala wanted to build houses she should have become a developer like Trump.

And if Trump really wanted to be a good president he should have been a politician like Harris.