re: Trump promoting a 50 year mortgage. Dave Ramsey will lose his mind. Terrible idea - imo

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The average age of a first-time home buyer is 38.

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Because, with interest rates currently around 6%, younger buyers cannot afford, or do not want to afford, the monthly note. A longer mortgage period would help those folks. In rough terms, monthly payments on a 50yr note offered at 6% would be similar to a 30yr offered at 4.5%. In monthly payment terms, it would feel like getting a 1.5% rate drop.

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So somehow it's a good idea for people to have a mortgage for so long that they don't even pay off the interest until well over a decade after their income has dropped due to retiring? Or are you saying people should delay retiring until they get near 80?

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It's odd anti-free choice conjecture.
I'd contend it is a good idea to give folks the FREEDOM to decide for themselves.

Current loan rate pricing locks them out of the consideration. So instead they rent, while funding disproportionately expensive, depreciating assets with long loan terms ... luxury cars, boats, iphone 21's, etc.

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You mentioned appreciation, but that's going to depend on equity. For a 50yr loan, you're only accruing around 5% equity after 10 years.

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You assume a great deal.

E.g., You assume no refinancing as, or if, rates change for the better. But most importantly, here is what I'm talking about with consumer choice and freedom:

Scenario:
A couple would like to purchase a perfect $600K home.
But with their 4y/o child over a year from kindergarten, the wife is still a year or two from being able to return to work, in their estimation.
So, for those two yrs or so, $3100/mo is their affordability threshold.

A 30yr 6% loan would run them $3,598/mo. That's $500/m over budget, and out of range.
But a 50yr at 6% would put them in range at $3,087.

Here's the kicker .... if, when she gets her job, they then decide to toss an extra $511/mo toward their principal ($3,598/mo total, as would be the requirement with the 30yr), they pay the note off in 30yrs, with roughly the same accrued interest cost as if they'd gotten the 30yr loan to begin with.

In other words, at any time, they are free to self-convert their 50yr note to a lower term by paying down principal.

So this literally is about simply giving folks the choice to invest in a property (appreciating asset) that they could not otherwise consider, at present.

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The problem with this analysis is a 50 yr and 30 yr will have different interest rates. You can go ahead and assume a 50 year will be 50 basis points higher.

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30-50 BPS. Assuming 50BPS, the monthly payments still get knocked down to what they'd run at current 30yr rates, minus 1%. If the alternative is renting, at least the offering might give first time homebuyers an alternative.

With moderate to high inflation a 50 year mortgage with a fixed rate would be celebrated. Imagine ten years in and the mortgage is half of what a similar rental costs.
Or it could be a total nightmare with any amount of deflation which isn’t likely. The unknown here is how effective AI becomes in the next few years.

I just think the optics of this look terrible right now, even if you present it as an option to get more people in a home and to provide more financing options for the market. It's like conceding the housing market is insane and unaffordable for many people, so let's throw something else out there to make them debt slaves instead of trying to do something to get prices down.

The bottom line is we probably needed real deflation at some point instead of bailouts when we had financial crises the last 30 years.

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The average age of a first-time home buyer is 38.

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We were 29 and Prime was 13.5 but we got bond money at 11.5 as first time home buyer. Thanks, Carter!

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or unless housing appreciates

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I mean how do they not understand this. The average rate has been about 3.4% the last 100yrs

If they buy a 500k loan when they go to sell in 7yrs they can net 100k +

30yr loan, 50yr loan or a 100yr loan doesnt matter
Not bad

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despite you begging for my attention

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Says the idiot that engaged first.

The bad news for you is that even your former clapping seal buddies are either gone or have figured out you are an idiot.

Have a great Sunday.

What was the lie again?

I don’t read your stupidity that isn’t addressed to me so I have no idea what stupid comments you’ve made. I assume based on the downvotes that they were pretty stupid as usual after a quick scan.

Too many things in the USA are treated like just another trade good.

The USA should be for Americans. Not foreign interests and not mega corporations looking to squeeze Americans by buying up everything and jacking up the rates.

You are an idiot. Please link where I said I would be mad if my home values went up.

Your need to make shite up as usual is hilarious.

I don’t care two shits if a random idiot doesn’t believe the truth. It means diddly.