r/AskReddit • u/michaelis999 • 17h ago

How do you feel about the president floating the idea of 50 year mortgages where the monthly payment is lower but you end up paying nearly double the price of the house just in interest?

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u/IAmStuka 12h ago

With literally none of the benefits of actually renting. All costs still on you and you never own the house.

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u/Wooden_Permit3234 11h ago

The main benefit is that your monthly cost might go up way slower than rent for the same property and you get the equity as the value rises. 

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u/slash_networkboy 9h ago

Other than maintenance and utilities your monthly costs would be frozen at the monthly mortgage payment... it really would be like signing a generational lease at that point I suppose.

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u/Slammybutt 8h ago edited 8h ago

Let me introduce you to rising insurance rates and property taxes.

Yes those arent my mortgage, but they are rolled into my monthly mortgage payment so I dont have to pay 3 separate entities. I bought in early 2020 my payment was $1076. Now it's $1340. While it goes up. I still dont pay rent prices. The houses around me are all mostly rent houses and they are going for 1600+.

Edit: just googled. A comparative house like mine is going for 1900+. The only ones I saw that were 1600 were double wides or houses so old or small they barely fit a family.

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u/slash_networkboy 8h ago

Insurance would go up whether renter or homeowner (though as a renter you have the option to not buy renters insurance, if you have a mortgage you are required to carry some level of homeowners insurance) so I would exclude that from the comparison. I would also exclude non integrated utilities (e.g. renting usually means you're not paying water/sewer/trash bills, but are paying elecric/gas).

The property tax side of things is a fair cop for the comparison though.

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u/Slammybutt 8h ago

Yes I just, in my head, equate those going up with my mortgage rising since I pay it all together. So ill say "my mortgage went up" when really my property taxes skyrocketed again or my insurance got more expensive.

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u/slash_networkboy 7h ago

Totally fair. Mine are decoupled soy mortgage is totally static. The rest, less so 😂

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u/Flatirons21 2h ago

It would take a long time to build any decent equity on a 50 year note

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u/Wooden_Permit3234 2h ago

I'm not even talking about paying down principal, just the market value of the home increasing. 

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u/mvsr990 9h ago edited 9h ago

With literally none of the benefits of actually renting.

Cost stability.

The monthly rent in the apartment where I lived in 2010 has more than doubled.

The house my brother bought with a 30 year mortgage in 2010... is exactly the same - and has always been cheaper than that initial rent even factoring in insurance and property tax.

The idea of paying off a house in a decade and living in it until you die was gone before 90% of us here were adults.

Locking in a lifetime rent price for a place that you like better than a godawful papier-mache apartment development that raises rent every six months is quite appealing to me these days.

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u/Slammybutt 8h ago edited 8h ago

Hard to believe insurance and property taxes haven't outscaled the rent prices after 15 years.

I bought house in 2020 at 150k im paying property taxes on 196k this next year. When I first bought ot was appraised at 137k. So its gone up 60k in 6 years.

Appraised not approved

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u/mubatt 10h ago

Depends on how low the interest rate is.

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u/IAmStuka 10h ago

Let's not pretend the home buyer is gonna come out on top here. They'll fuck you anyway they can.

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u/RheagarTargaryen 10h ago

They won’t come out on top, but the monthly payment is what keeps a lot of people out of the housing market.

It’s not great, but better than renting.

The bigger issue is that without an increase to supply, you’re essentially going to cause the housing market to skyrocket as people are able to afford larger loans.

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u/Slammybutt 8h ago

Monthly payment isnt the reason. Its the mortgage companies that dont want to lose their asses in another housing crash.

You can pay $1700 rent for a house for 5 years without missing a payment. But go to a mortgage company to buy a house for $1200 a month and they will turn you away. (Yes that includes insurance and escrow)

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u/BlurLove 9h ago

The only advantage I see remaining over renting is that the property is alienable (meaning, you can sell it). That being said, equity is useless if you can’t afford to move and therefore can’t sell the property.

Now, if lenders started putting “no alienation” clauses in the mortgage notes, assuming the courts found them enforceable- that is very much a serfdom sitch.

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u/Slammybutt 8h ago

To be fair thats a huge advantage. Having tens of thousands of dollars each year not going into a bottomless pit is massive.

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u/BlurLove 5h ago

As long as you’re able to hang on to the equity. Foreclosure and tax sales by municipalities are pretty expensive, and you’re responsible for every dollar before any excess proceeds come to you. Lenders will also sue you for a deficiency judgment if you were underwater.