Crime Trump, 50 year mortgage?

[A Very Serious Cat]

My dad is 74, but regardless people will be paying the same amount in rent - actually more as it goes up every few years. The mortgage is fixed.

At least the family will have what ever equity is in the place when you die if it isnt paid in full.

There's also nothing to stop you from selling before the mortgage is fully paid either. For example a couple buys a 4 bedroom place, has a family and later when the kids have moved out they sell and downsize using their equity to be mortgage free. This is quite a common thing to do

 

[UFCUCF]

Making debt more readily available drives up the prices, see student loans and collage tuition.

The prices rise because the cash buyers now compete with a greater number of credit buyers.

On the whole more debt is bad for the middle class and the economy.

 

[nostradumbass]

Ok so a 50 year mortgage can be a way to buy a house with the minimum mandatory repayments and can effectively be any term you want, not such a bad deal if you're smart enough to not waste that money you save each month.

There is an argument that this allow more people to buy, increasing prices by I'd guess the amount of people helped into the market with this wouldn't be enough to move the market all that much

Correct, and it's not like you can't just get a shorter term loan in the first place if that's what you want or can afford.

It basically amounts to like a decade of renting during the time when young people would have been actually renting, only they've locked in the buying price from a decade earlier and have a much lower principle they can start putting more money into as opposed to just starting a 30 year mortgage a decade later.

Would vary based on exactly which years you're starting, but the median age for a first time home buyer is now 38, so if that 38 year old had gotten a 50 year mortgage after college 15 years ago, the median home price then was $210,000, where instead they just rented for the last 15 years, and now they can start a 30 year mortgage when the median home price is $512,000.

The downside is that the supply still does need to increase at a way faster rate than it has been or prices will go way up from more people being able to buy homes.

 

[A Very Serious Cat]

Correct, and it's not like you can't just get a shorter term loan in the first place if that's what you want or can afford.

It basically amounts to like a decade of renting during the time when young people would have been actually renting, only they've locked in the buying price from a decade earlier and have a much lower principle they can start putting more money into as opposed to just starting a 30 year mortgage a decade later.

Would vary based on exactly which years you're starting, but the median age for a first time home buyer is now 38, so if that 38 year old had gotten a 50 year mortgage after college 15 years ago, the median home price then was $210,000, where instead they just rented for the last 15 years, and now they can start a 30 year mortgage when the median home price is $512,000.

The downside is that the supply still does need to increase at a way faster rate than it has been or prices will go way up from more people being able to buy homes.

38 for the median age for a first home purchase is pretty bad. I was lucky enough to get in at 28 in an expensive area before the prices went even more crazy. My 30 year mortgage is already down to a 20ish year term as well.

For the American mortgages, say the 50 year one, is an interest rate locked in for the full 50 years at the time you take it out?

 

[PainIsLIfe]

Making debt more readily available drives up the prices, see student loans and collage tuition.

The prices rise because the cash buyers now compete with a greater number of credit buyers.

On the whole more debt is bad for the middle class and the economy.

I've thought about it possibly driving up prices, but I think you look at this as a case of paying rent for 50 years or paying this ridiculously long mortgage.

It isnt something for everyone, but it could be a great alternative for low income individuals. And as @A Very Serious Cat said, you could sell early.

 

[nostradumbass]

38 for the median age for a first home purchase is pretty bad. I was lucky enough to get in at 28 in an expensive area before the prices went even more crazy. My 30 year mortgage is already down to a 20ish year term as well.

For the American mortgages, say the 50 year one, is an interest rate locked in for the full 50 years at the time you take it out?

Don't know yet, but like 95% of mortgages in the US are fixed rate, so I would imagine so. I don't believe fixed rate are that common in other countries, but that's the norm here.

The people complaining don't actually want any solutions, they just want to spend years screaming "housing is unaffordable and people can't buy a home, maaaaan", then bitch about what is really the only near term solution. I mean 9 months in, Trump wasn't going to snap his fingers and suddenly like 30 million new houses appear.

The US has been below replacement birth rates since the early 70s, yet somehow the number of households has gone from 68 million to 133 million with only 46 million homes built in the that time, and the reason is a combination of massive immigration in that time, people getting married at lower rates and older ages and divorcing more, so there are fewer people living in family units and more living alone, and red tape and shitty zoning preventing the number of houses from keeping up.

"Ban private equity from buying houses" sounds nice on a meme, but private equity only own like 2-3% of single family houses. A president can't just push a button to make houses cheaper, and the solutions from the people complaining are either nonexistent or shit that would take like 15-20 years just to catch up from the houses they already didn't build to keep up with the growth in number of households.

 

[N13]

This is not the solution.

The Federal Reserve needs to cut rates, and a lot.

 

[KAZSoliloquy]

Ok so a 50 year mortgage can be a way to buy a house with the minimum mandatory repayments and can effectively be any term you want, not such a bad deal if you're smart enough to not waste that money you save each month.

There is an argument that this allow more people to buy, increasing prices by I'd guess the amount of people helped into the market with this wouldn't be enough to move the market all that much

surely that's the ilk who will be taking these loans. definitely not the less-fortunate with volatile job records who can finally see some sort of way to kinda be able to make payments every month, despite paying almost double overall when accounting for interest. and surely, those people won't find themselves in over their heads at some point over the next 50 years, leading to a massive housing bubble that inevitably gets the rug ripped out on it.

easiest short you could ever bet on.

 

[A Very Serious Cat]

Don't know yet, but like 95% of mortgages in the US are fixed rate, so I would imagine so. I don't believe fixed rate are that common in other countries, but that's the norm here.

The people complaining don't actually want any solutions, they just want to spend years screaming "housing is unaffordable and people can't buy a home, maaaaan", then bitch about what is really the only near term solution. I mean 9 months in, Trump wasn't going to snap his fingers and suddenly like 30 million new houses appear.

The US has been below replacement birth rates since the early 70s, yet somehow the number of households has gone from 68 million to 133 million with only 46 million homes built in the that time, and the reason is a combination of massive immigration in that time, people getting married at lower rates and older ages and divorcing more, so there are fewer people living in family units and more living alone, and red tape and shitty zoning preventing the number of houses from keeping up.

"Ban private equity from buying houses" sounds nice on a meme, but private equity only own like 2-3% of single family houses. A president can't just push a button to make houses cheaper, and the solutions from the people complaining are either nonexistent or shit that would take like 15-20 years just to catch up from the houses they already didn't build to keep up with the growth in number of households.

Man I wish I could've locked in the interest rates we had during covid for 30 years. The longest I can fix a rate is 3 years or 5 with some other banks but the 5 year rates are usually pretty shit

 

[D3thr0n3d K1ng]

Why not a 75 or 100 year multi-generational loan?

 

[Mr Holmes]

The Federal Reserve needs to cut rates, and a lot.

 

[A Very Serious Cat]

Why not a 75 or 100 year multi-generational loan?

I know this is facetious but the difference in monthly payments between a 50 year and a 100 year loan is pretty minor

 

[Kung Fu Kowboy]

I doubt I'm around in 50 years.

 

[Mr Holmes]

Sounds like a good deal for the banks. But I suppose you could just pay down principle when you reach your high earning years.

 

[MeatheadMike]

you can't legislate "incentivization" you must seek it with ulterior legislation. what do you suggest?

Of course you can.... tax breaks and subsidies is how you incentivize the behavior you want.
To disincentivize just do the opposite... tax hikes and penalties on the behavior you don't want .

 

[MeatheadMike]

This is not the solution.

The Federal Reserve needs to cut rates, and a lot.

Cutting rates makes money more accessible.... basically the same effect printing more money.
Not a good idea as long as inflation is still high.

 

[Croaker]

Or ya know...we can address the root issue. Housing supply, not loans.

How do you do that? Enlighten everyone on Sherdog how you're going to magically force companies to build homes.

 

[N13]

Cutting rates makes money more accessible.... basically the same effect printing more money.
Not a good idea as long as inflation is still high.

Inflation is a problem but it's flat now.

Those rates are going down. Trump is on the war path with the fed.

 

[MeatheadMike]

How do you do that? Enlighten everyone on Sherdog how you're going to magically force companies to build homes.

Subsidies and tax breaks. Seems to work well for the oil industry, the farming industry, and Tesla.

Also put new taxes on landlords/corporations renting out single family homes, increase the tax for the more homes they rent, and give them tax breaks if they sell those homes.

 

[MeatheadMike]

Inflation is a problem but it's flat now.

Those rates are going down. Trump is on the war path with the fed.

Inflation rate was about 3.2% a year ago, currently its about 3%. It is coming down but very slowly, and ts still well above the Fed's target of 2%. Not really a good time to cut rates significantly, unless there's a big change.

Yea Trump is leaning on them, but situations like this is why the Fed is supposed to be independent. I guess we'll see what happens