I can personally attest to an amazingly clean home, delicious smells coming from the kitchen and a day full of really bad language coming from every corner of my home.
When our girls were little, one of their friends referred to him as "the dad" (as in, "Is the dad coming to the park?") and it stuck. But I like "the husband," too. :)
One of my many careers was Mortgage Loan Broker. Agree with you 100%. Especially that it will enrich communities because Pride of ownership kicks in. People pay off mortgages early all the time for various reasons, even if they don't move. And lowering the cost of entry will help many.
Just because the majority of people lack the industriousness to pay extra on the principal and keep moving to new homes every few years doesn't mean it's a sound practice or financially responsible.
I know many people who paid off their mortgages and owned their own home outright. My mother and father for an example, and my grandparents too.
A friend of mine was discussing the topic with me, just a few days ago via email. Here was how he approached home ownership -- some food for thought, an excerpt:
"Before we built our dream home on our dream land (that we bought with cash) we then spent 7 years living in a 1999 (remodeled) double wide rent/Death Grip free well under our means to build the Dream House Death Grip free. I still drive two 25 year old beaters (wifey is in a modest SUV bought slightly used so the first owner took the big depreciation hit).
Before that we paid off a 30 year DEATH GRIP in 13 years by making extra principal payments every single DEATH GRIP month…until all the Bankster fingers were pried off our throats.
I had a speaking business in many exotic locations (and in two other countries) that was were we took our vacations most of it on my clients. All that savings went to reduce the Death Grip.
My wife was not a math person, nor did she understand how the Banksters front load the interest. I put together a massive binder with tabs for every month for all the Bankster paperwork…and kept a running total on what we owned, both in interest and principal on the 30 year strangulation, the payment proof of every month, and the extra PRINCIPAL payment, then the new balance.
It was one of the few things we augured about as I always wanted to MAX the principal payment, and I never, ever would allow a Credit Card balance to carry over.
It took a while but as we got closer and closer to the 13th year…she came around.
Some people are free spirits with money…and others are the opposite. When two free spirits get married they will eventually produce a bankruptcy, and often a divorce."
And yet people finance vehicles for 6 maybe 7 years and just trade them in and start the cycle all over. This is for something that will NEVER appreciate. On the plus side I can buy for cash those vehicles after the major depreciation has been paid by those slaves to debt. Also, my 20 year old truck still looks and runs great.
Many newer cars are expensive high tech pieces of junk anyway. Was in a wreck in April and thank goodness the kid who hit me had insurance, but of course they totaled my car. I mostly work from home and hubby is retired so we limped around with one car while I was stuck in analysis paralysis. Finally found the same make and model of my old 13 YO sedan, 10 years old, in pristine condition for $10K. Going to drive it til the wheels fall off, or some other jackwagon plows into me on the interstate.
Yes! Kept a 30 year mortgage for the flexibility in down times but paid it off making extra principal payments in just under 16 years. Lucky to have married a math person and I am a math person too. We hate debt and pay cash for cars (we make monthly payments to a car fund for big repairs or replace) and pay our CC balance in full every month.
Pretty much the same here. We refuse to carry debt, paid off the house in 19 yrs by doubling or paying extra, save and invest the rest. Less to worry about in todays uncertain times
I've been self employed for 25 years and hubby has been commission sales calling on retailers his whole career. Which means 'steady paycheck' has never been a thing. His big commission checks come when Christmas items ship out in Aug - Oct. My work is mostly project based. So may have years with multiple big projects and years where it's hit and miss. So we made the decision to lower our fixed costs so that a bad year or month meant we would at least have a roof over our heads. We'd been paying extra on principal all along but went scorched earth throwing every spare dime at it the last 3 years. Christmas after my parents sold their house and downsized they surprised my sisters and I each with a $5K check. That took us to less than $1K balance and boom we were done. So yeah, had a little help but it was mostly just frugal living and telling the kids and ourselves 'NO' to things that were 'wants' and not 'needs'.
Especially since property taxes and insurance has gone through the roof. Some friends still with mortgages are seeing escrow accounts balloon, and thus monthly payments go up by as much as $500 a month! We shopped our HO policy but still $1K a year more than 5 years ago and Property tax increased $1200 in one year, so not as bad as some, but still money you just kiss goodbye.
Yes I get that fully. We left Southern Maine and a home valued less than the one we purchased in West Virginia and our taxes there were $6800/yr. Here they are/were $3400 but there has been a huge influx of swamp people (from Washington DC) moving here making massive new developments and our taxes this year went to $4000 so sad. It is still much less than before. And there is no way for the average citizen to effect change.
It’s called living within your means and planning efficiently. Sounds like you’ve been an expert at doing both. I wish more people were able to take on those principles, especially young people who want instant gratification. Both of my girls are hard workers and they know where my husband and I came from, which was not much. They’ve seen an appreciate how hard we work for everything so I know that they will carry these forward
Both of us came from working class homes where stretching a dollar was a necessity. Internalized that, although we don't wash foil or re-use plastic bags, we do lots of frugal things just as a matter of course. Taught our kids the same. One is frugal and smart with money and the other is starting to come around after a decade of blowing money left and right.
I am with you on this. We are lulled into having to have everything at once. We got married and my wife's parents had a little cottage that they allowed us to stay in to save for a house of our own. I worked 2000 overtime hours in one year to save for the 20% down payment on our first home. It was a new modest 24X34 cape with only the first floor finished. It cost $54,000 on 3 acres in a new development. We worked hard had 2 children and 2 cars. My wife stayed home with the children. We finished off the house ourselves with outdoor improvements, 2nd floor and kids room in the basement. It was during 1983 and the interest rates for the Maine first home loan was 11.5% and we took a 15 yr loan with 20% down as required. We sold it for $110,000 7 years later and before it sold we took and equity loan of $40.000 to purchase a piece of land in a development closer to town, another 3 acres. We borrowed $125,000 to build our new 2.5 story colonial home and I was the general contractor. We ended up with that for 33 years with tons of upgrades and maintenance all in approx. $270,000. We received a small inheretance and paid it off right about 50 yrs old and the children had finished college. I believe we feel free not having a mortgage with a bank. We do not like to owe money. But the monkey on our back and every other land owners is the city or county property taxes, we never really own our property.
We bought our home in 1990 when a 'good' interest rate was 11 3/4%. Before we re-financed, the payment was double what rent would have cost us. So it's all relative. Every generation has had it's challenges.
But what kind of soup Jenna? How about getting rid of the IRS and/or ending the unconstitutional federal income tax that steals my money on a daily basis and gives it to the biopharmaceutical military industrial complex and Israel?
Housing prices aren't going up. Our dollar is being inflated. This is the core problem that needs to be fixed, not introducing more vehicles of debt.
This is all purposeful. They don't want us owning our own properties and being self sufficient. They want us to rely on them so we can be easily controlled. You will own nothing and be happy.
I agree with much of what you said... but MY point was the outrage over 50 years v. 30 years. For some people (obviously not all), it won't make a lick of difference. And if they decided to NOT "introduce another vehicle of debt," that just means people continue to rent, and not even have a SHOT at owning. And yes, they may never own it... but their kids and grandkids might--which would NOT happen if they rented forever. Just saying. ;)
The biggest problem with longer term mortgages is that it benefits the banks more than the average person. Mortgages are front loaded debt vehicles, so we spend most of our money paying off just the interest of the loan in the first few years of the mortgage, so for 50 year mortgages, we would pay off very little of the principal in the first two decades. For most people who decide to move before the 10 year mark, that means they gained very little to no actual equity from the mortgage because all the money was spent towards interest instead of the price of the house.
The last thing we need is to give more money to the banksters. This is all on purpose though. Our society is being slowly flushed down the toilet so that we all become so desperate and dependent on government and end up in a situation where the vast majority of people will do the one thing they have been conditioned to do: beg big brother for help.
By the way, do you know how to tether off of your phone for internet so that you can continue using the internet from your laptop if your home internet goes down? If not, just enable the mobile Hotspot option and connect your computer to your phone's Hotspot connection. 🙂
BUT THE ALTERNATIVE IS GIVING MONEY TO LANDLORDS--WHO ARE BANKSTERS! You can't argue one and not acknowledge the other. You may not be hammering down principal in the early years, but you’re capturing the appreciation, which is where almost all real-world wealth in housing comes from. If a home goes up $40K, $80K, $120K in value over the years (which is extremely common), that’s your gain — not your landlord’s.
(AND YES I TRIED TO TETHER AND NOTHINGGGGGGGGG WORKED. HENCE THE SOUP. ;)
Yes, this is true, so what's worse, benefiting the landlord or benefiting the big banks? lol...
Either way, this 50 year mortgage nonsense is just a bandaid for a much bigger problem. I can appreciate the fact that the house appreciates in price, but that doesn't mean all that much if you're moving to a more expensive house that appreciated at the same rate, if not more.
You know what would help the average person more when it comes to mortgages? Fixed low interest rates. The banks will still make money, just less money. No one is going to feel bad for the banks except for the banksters.
If you need help with the tethering, feel free to message me Jenna. It should be a simple plug and play type feature.
Also, did you really make soup or did you just pour canned soup into a pot? I'm getting rather suspicious due to your lack of acknowledgement. 🤣
Even though it may benefit the banks more than the average person, it still would benefit the average person. So where's the harm? Nothing new in that. My Amazon purchases sure benefits Amazon and Bezos more than it benefits me, but hey—it still benefits me. :)
Unless you sell or move somewhere cheaper... or sell and then rent or live on a cruise ship... or you die and leave it to your kids... lots of options... ;)
It's not a flaw. It is how the mortgage works. We spend most, if not all of our mortgage payments towards interest in the first third of the mortgage. This period will naturally extend with a 50 year mortgage.
And when people realize that the "money" they were loaned is a bookkeeping entry by their bank (with little to no savings behind it) their heads will explode. It's the most crooked business in history--by a wide margin.
The extension to 50 years simply extends the bubble that the Fed has created. They could let prices revert to the mean, but then boomers (and I am one) would lose the equity they feel they've earned, banks would have to take losses as prices dropped, and the .gov loses out on some appreciation based taxes.
Final thought from me today? The next 50 years may look like the last 50, but it could also look very different. Interest rates tend to move in very long cycles. Appreciation in housing is not guaranteed.
Indeed, we LOST money on our first house in...wait for it...the wine country region of Sonoma County, CA. We paid about $150k for it back in 1993 and lost about $12k when we moved three years later for a job. "Value" of it now? $605k. Gen Z is screwed.
Actually, my dh and I continue to discuss paying off our mortgage early, but we always decided against it. It just doesn't make sense when that extra 'payment' can be invested. We make more investing than the interest paid on the house. When we retire, the house will be/can be paid off and we'll have a bigger nest egg by waiting. Businesses leverage debt all the time. The true lack of property rights is property taxes. No matter the mortgage or not, we will always be renting to the government. And that's what's evil.
"unconstitutional federal income tax." How is it unconstitutional? 16th Amendment. (Altho that is the only Amendment for which states, while permitted unlimited attempts at ratification, were prohibited from withdrawing ratification once made.)
I think it does become constitutional after surviving the rather high bar of amending the Constitution. In addition, the founders included two ways in which the Constitution can be amended. They wouldn't have provided for a way to make adjustments to the Constitution if they thought that amendments were ipso facto unconstitutional. I guess what confuses me is I can't see how an amendment "doesn't become lawful." Can you flesh that out for me?
Laws today are just to maintain the modern slavery system. It doesn't matter if it's unconstitutional or not because that is subjective. The founders of this country did not tax wages and wages were never intended to be taxed. It should be evident to everyone now that laws exist to protect the wealthy and the powerful.
The Progressive Era gave us a bunch of really bad amendments. My all time unfavorite is popular election of senators. We'd be better off if the states still had representation in Congress.
I'm not so sure about that, as I would have not only 2 blue senators, but all my congress critters would also be blue. Crooked blue state. At least my state has several conservatives in congress due to popular election.
Home prices are indeed going up. The home price increases have far outpaced inflation. A home purchased in 1960 can today be sold for about 50% more (adjusted for inflation). A four bedroom home on a half acre lot purchased for $17,000 in 1960 (which would adjust to $183,000 in today's currency) these days sells for around $280,000; an increase of 53%.
Yes, there's 53% increase but compared to what? You're only evaluating the house price using US dollars which have devalued greatly over time. Compare the house price to the price of an ounce of gold and the picture is totally different.
Year...........House price.........Gold price...............Ozs. of gold to purchase
So what cost you 328 oz. of gold in 1960 will only return 174 oz. in 2024 if you sell it. If you had 328 oz. today you could buy almost two houses (or twice the size of the house). It's my opinion that inflation has masked the true value of assets. You (and most everyone in the comments here) see a larger number and assume that means a greater value, which on the first glance makes sense and I would do the same.
The economist, Thomas Sowell, enlightened my perspective on economics and one of his famous quotes is: "Compared to what?"
The 53% increase is compared to the inflation adjusted price from 1960. Unfortunately our money is fiat, so comparing the home prices to the contemporary value of gold is as irrelevant as comparing the home prices to the contemporary value of cigarettes or baseball bats.
Actually paid off early. Saved and paid but times are different now. A 50 year mortgage at the rate younger folk are dropping over from vaccines not sure if a good idea.
Actually paid mine off early as well. And when I sold my home having put about $270000 into it I sold it 2 years ago for $730,000 and upgraded to a better home for $605,000 but in a more economical state.
I dunno…start w a 50 year if that gets you in…buy sell, buy sell, use profits to upgrade to a 30 year, maybe eventually a 15 year. It’s all a game. Like Jenna, I’ve made a lot buying and selling homes over the years and am now mortgage free. Equity is equity and it is all better than rent.
Ps. Glad you’re alive and well, Jenna! We did miss you this morning.
Exactly! It's a game. And no one is forcing anyone into this... but also, as I said, it's not like the alternative is "oh, you don't want a 50 year mortgage? okay here's a phat house with dirt cheap monthly payments and you can rent to own..." I'm not saying ALL THE OTHER STUFF ISN'T A HOT MESS, but I don't get the uproar over an option that *might* make sense for *some people.* #MyMortgageMyChoice hahahahaha
I especially appreciate you pointing out that our grandparents, parents and even some of us boomers lived a very different life style than today’s society. Imagine not having a cell phone bill (many are paying for family members). That alone is a lot of money that could go to a mortgage. What about cable & internet? Younger gens give boomers a bad rap because we are able to afford a home & might even have paid one off. They claim it was “easy” for us. Well, I packed a lunch for work each day, didn’t buy a $10 cup of coffee on the way in, colored my own hair, and had zero Door Dash! I went a solid year without eating out to save money for a down payment. Sometimes it comes down to what you’re willing to give up to get what you want.
Exactly!!! I lived in the crappiest apartments you could imagine in NYC, had roommates, took the subway or bus when everyone else took cabs, cooked at home (UNHEARD OF in NY) or if I did get takeout, I'd make it last for three meals! By the time I was thirty I'd saved nearly 100K and I never made more than $50K a year.
My daughter is still on our phone plan (she's married) and sends us a check every month. It's cheaper for her to stay on our plan than it is for her and her husband to get their own. So he sends his parents a check every month for his phone and she sends one to us. We would rather see them save that little bit every month than drop from our plans and increase their payments. My mother is on my sister's plan - because again, it's cheaper for her to be on a multi-person family plan than to be on one all her own. Sometimes combining stuff just makes more sense.
Totally agree. It’s a smart strategy and tons of people do this. My point was we didn’t used to even have cell phones so all that money could go to expenses, unlike today.
This is proof Trump could cure cancer, diabetes, autism and birth defects while walking on water, and the loonie left would wail loudly crying foul! They have no qualms with leasing a car that’s too expensive for them to buy and ending up with NOTHING, but a 50 year mortgage that builds at least some equity and gives them a yard of their own is heinous. The only other way is to lower interest rates a LOT (which Trump has no power over and the Dems don’t want) or lower the value of homes people have already purchased, wiping out their equity and causing everyone to be upside down in their mortgage. (Where is the “fair” in that?) We’ve seen what happens when the housing bubble bursts, and it’s not pretty. So kudos for Trump!
30 year mortgages aren't debt slavery? Seriously... unless you are like Jenna and hopping homes, it takes a damn long time (30 years) to pay off a 30 year mortgage (without accelerated payments).
Apparently I'm one of those weird people that will actually have my mortgage paid off in a few months. Sure I could take out a new mortgage and do something with the money to make more money (hey, my investments in Amazon and AMD have paid back far more than a 6% loan costs). But I really like the idea of only owing property tax! Ease of mind is worth something too!
Big Dave Ramsey fan, although I don't agree with him on everything, agree with his mantra of a paid off home being a way to avoid risk. Yes, you can get a 6% loan and then use the money to invest and make 10% or more but that introduces risk. Job loss, unexpected big expense, or any number of disasters can derail best laid plans. With a paid off home you have ZERO risk of foreclosure. (unless you don't pay your property tax, but at least without a mortgage payment you can save a little each month for that one) Paid off ours in 2005 and when the great recession happened we saw our home value drop, but it was purely a paper loss, no need to panic that we were 'upside down', like our neighbor, who did a big cash out refinance to remodel and then saw a job loss that meant she couldn't afford her payments. She just quit paying and squatted for 2 years before the mortgage company finally foreclosed. Walked away with half her stuff still in the house and someone came and loaded up multiple dumpsters afterwards. Horrible waste. I did nab the really nice planters in her back yard before the dumpster guys got to them, though.
We have been skimping for almost 20 years in the home we are in. We started with a 40 yr mortgage. We refinanced to a 20 year at 2.5% about 5 years ago, but even with making an extra payment each year AND sending extra for principal each month, I do feel enslaved because we still have 13 years left on the loan and retirement is coming before that. I wish we could have just done a 20 year from the very beginning because ALL that interest we paid the first 15 years could have helped us instead knock down principal sooner and be free and clear today, and able to finally take vacations and actually enjoy life. But instead we are trapped.
But what has hurt us the most is the real estate taxes, which have almost tripled since we moved here. When people ask “then why didn’t you just double up payments to pay off your mortgage sooner?” I say it’s because of taxes. Right now our monthly tax bill is more than our mortgage. All our extra pay that COULD pay down the mortgage goes to that. We have paid over $250,000 in real estate taxes over the past 20 years. That could have paid off our home.
Also, we ended up with three children with disabilities and the medical expenses the entire time we raised them. You can’t plan in life for the unexpected expenses up ahead. Too many things out of your control can end up competing for your paycheck and that keeps you from being able to pay down a mortgage.
If the 50 year thing happens, I would say they need to change how it amortizes, because it would take 40 years before just half your payment starts to go to principal. 7 years??? In a 50 year loan you won’t have much of any paid equity at all, and would have to rely solely on market increases. BUT, those increases are eaten up by realtor fees.
There’s too many things in a 50 year that can keep someone from being financially free and own more of the equity in their home sooner, so yes, I believe it sets them up to be debt slaves.
Just my opinion. I see the “potential” for the other outcome but it is slim and not what the average lower-middle to middle class would face. Only wealthier people who earn more money would be able to overcome the negatives.
Ugh, Juju, that is a LOT. And I agree, the amortization would need to make sense. Again, just saying for SOME people it might not be the WORST option (when frankly the alternative is paying a slumlord forever...)...
And the private mortgage insurance PMI added to those who can’t put down - gulp- 20%. PMI should be dismissed, in my opinion it’s another form of robbery.
I hope I misread this. Any extra payments over the monthly payment must be marked as payment on principle. Otherwise, it will go to pay on interest while your principal continues to accumulate the same amount of interest. As you decrease your principal, the interest accumulated decreases.
Yes, it went to extra principal. We set it up that way. Yes we are finally past the 50/50 point but like I said it’s going to take more time for the principal to fall rapidly. The point I was making is real estate taxes and unexpected future medical bills (or other unforeseen financial circumstances,) can take away any ability to pay down the principal faster.
And if you try to flip houses these days, realtor fees are enormous. You have to have enough equity to cover those AND walk away with enough to invest again.
I think it will enable more young people to at least get their foot in the door of home ownership. What they choose to do with that opportunity is up to them. It’s all about choices. I also believe that only people be allowed to purchase, not corporations. I’ll bet people balked when the 30 year mortgage was talked about and eventually implemented. Just like what is taking place with the 50 year.
Good points Jenna that I hadn’t thought of. Longer mortgages could work for the more financially savvy & responsible. Trump has floated the idea of getting rid of capital gains tax on home sales. That would free up people to sell who might feel trapped in the big house & want to downsize for instance. It could increase inventory & lower prices. Having lower mortgage rates would help too. Anyone who was lucky enough to buy a home with a 3% mortgage rate isn’t going anywhere when current rates are more than double that. But first pass a law that doesn’t allow corporations to buy up & bid up property. Also on my wishlist is eliminating the property tax. I should live so long!
Thank you for being the ONLY voice of reason I have read. Of course, I wholeheartedly agree with you. I think the people who decry this option are the rich snobs that don’t understand apartment dwelling and have become cold shells of what once were empathetic people who now reduce our lives to dollar signs and balance sheets. As Bill Cole says to Mr & Mrs Blandings about the building of their house, “some things you buy with your heart.”
My grandparents bought a modest 19th century farm house on over 65 acres, working farm with a barn, fields, pastures, a corn crib, etc sometime in 1930s. Oh, yeah, no running water or electricity which they installed themselves. I think the house came with “central heating” by shoveling coal into a huge furnace. No thermostat so sometimes windows went up in the dead of bitterly cold Western Pennsylvania winter. Hand pump out back door by the milk house. Best and coldest water ever! And by necessity they had an outdoor privy. Not fun in the winter! Got indoor plumbing in the 1970s!
They managed to raise five children and virtually raised me as both my parents worked. The happiest days of my childhood were spent on that farm and I’m grateful to my grandparents for finding a way to buy it. Children today deserve at least some memories of living in their own home with their own yard and own bedroom—not a noisy, unsettled apartment. May those children, whose parents are now able to buy a home, treasure their home. and learn gratitude for their childhood memories.
What is George Bailey’s rant about to Mr Potter about the people that drive the taxis and do manual labor do most of the living and dying in Bedford Falls deserve to raise their children in a clean house of their own rather than renting one of Potter’s slum houses? Jimmy Stewart delivers those lines with his signature squeak in his voice for emotional emphasis.
Oooooof I felt this in my bones! YES. I have so many memories of my grandparents' homes, much like yours, without all the "creature comforts" but did we care??? NO WE DID NOT! I could not agree more and love sharing these stories.
Thanks for that movie title - I'm going to go watch it! Thankfully it's available on YouTubeTV - the only subscription we have (because we don't pay for 5 streaming services!!).
It is a delightful comedy. I hope you enjoy it. Saw YouTube had it available but to rent. The Bill Cole quote is near the end of the movie after the house is built.
Here’s my concern (MBA Finance, NYU Stern Business School, admittedly outdated!). The problem is the market always adjusts to the monthly payment. If the target buyer can afford $3,000 a month with a 30 year mortgage on a $500,000 house, then when 50 year mortgages are available then the price of the house will move to $570,000 to attract the $3,000 dollar a month buyer. The hidden truth is a 50 year mortgage will inflate housing prices. It doesn’t help.
I was pretty dumb in b-school and the only finance I did after I graduated is working on financial IT systems. I came away with something when it comes to car leasing. A lease is like a loan (mortgage) with no declared end date. So when I wanted to buy a spiffy BMW to be like the other wannabes in Los Angeles, I looked at the asking price, the interest rate I would pay on a six year loan, and what I should pay for two years of that loan (there were a couple of other factors . . . my only advice here is never buy down the loan, err lease, but put down as little as possible, like first and last). Anyway, the point being that a 50 year mortgage is like a lease, and leases allowed automobile dealerships to jack up prices to get more buyers (uhm, lessors) to buy cars they couldn’t afford but could afford if the loan was long enough. That’s why we’re looking at $40,000 entry level cars now. It will be the same with infinite mortgages (sorry again, I mean 50 year mortgages).
I don’t dismiss Jenna’s argument about getting one’s foot in the door. But you can do the same thing with a variable rate mortgage where the low 3 or 5 year initial rate qualifies you, but to avoid another 2007-8 collapse, you have to be a committed flipper, and only be a flipper if you enjoy moving. In my mind the cheap variable rate and the 50 year mortgage are functionally equivalent. for the first 5 or 10 years you won’t make much of a dent in paying down the loan so you’ll have to be betting on appreciation. If the 50 year mortgages tempts home builders and investors to increase the housing stock, prices will stagnate (I know that’s hard to believe, but supply and demand is the one aspect of economics that works almost all the time), and you won’t be reap the rewards of home ownership as readily as 15 or even 30 year mortgages homeowners have somewhat historically benefited from.
I was able to lease the kinds of cars I really couldn’t have afforded to buy and cars depreciate very quickly, so I’ve never looked at them as an investment and always assumed my cost of transportation was an expense and not an investment. A house is a place to call home and raise a family in and hopefully, by keeping up with maintenance and paying down the mortgage as quickly as possible, it will provide a place for a comfortable and enjoyable and stress free retirement. I’m happy to answer any questions if my little editorial on 50 year mortgages wasn’t sufficiently clear (and it likely has some holes so I won’t be offended if anyone points them out!)
I can personally attest to an amazingly clean home, delicious smells coming from the kitchen and a day full of really bad language coming from every corner of my home.
You made it honey.
Are you "the husband"?
(Reference to guys who call their spouses "the wife".)
When our girls were little, one of their friends referred to him as "the dad" (as in, "Is the dad coming to the park?") and it stuck. But I like "the husband," too. :)
I am both "the dad" and "the husband". Sometimes she calls me other things too. Just sayin.
Careful or I'll block you, honey. ;)
🤣
Yeah! Don't they know the correct term is "The Bitter Half"?
Hopefully not! that's so sad. :(
My husband is "That Man" [a 'that girl' tv reference] He calls me "Woman" and he didn't want his name out there, so win win. <3
My husband calls me “woman” too! 😂
😂
One of my many careers was Mortgage Loan Broker. Agree with you 100%. Especially that it will enrich communities because Pride of ownership kicks in. People pay off mortgages early all the time for various reasons, even if they don't move. And lowering the cost of entry will help many.
Just because the majority of people lack the industriousness to pay extra on the principal and keep moving to new homes every few years doesn't mean it's a sound practice or financially responsible.
I know many people who paid off their mortgages and owned their own home outright. My mother and father for an example, and my grandparents too.
A friend of mine was discussing the topic with me, just a few days ago via email. Here was how he approached home ownership -- some food for thought, an excerpt:
"Before we built our dream home on our dream land (that we bought with cash) we then spent 7 years living in a 1999 (remodeled) double wide rent/Death Grip free well under our means to build the Dream House Death Grip free. I still drive two 25 year old beaters (wifey is in a modest SUV bought slightly used so the first owner took the big depreciation hit).
Before that we paid off a 30 year DEATH GRIP in 13 years by making extra principal payments every single DEATH GRIP month…until all the Bankster fingers were pried off our throats.
I had a speaking business in many exotic locations (and in two other countries) that was were we took our vacations most of it on my clients. All that savings went to reduce the Death Grip.
My wife was not a math person, nor did she understand how the Banksters front load the interest. I put together a massive binder with tabs for every month for all the Bankster paperwork…and kept a running total on what we owned, both in interest and principal on the 30 year strangulation, the payment proof of every month, and the extra PRINCIPAL payment, then the new balance.
It was one of the few things we augured about as I always wanted to MAX the principal payment, and I never, ever would allow a Credit Card balance to carry over.
It took a while but as we got closer and closer to the 13th year…she came around.
Some people are free spirits with money…and others are the opposite. When two free spirits get married they will eventually produce a bankruptcy, and often a divorce."
And yet people finance vehicles for 6 maybe 7 years and just trade them in and start the cycle all over. This is for something that will NEVER appreciate. On the plus side I can buy for cash those vehicles after the major depreciation has been paid by those slaves to debt. Also, my 20 year old truck still looks and runs great.
Not to mention how much people pay for phone/internet/streaming and whatever other First World luxury perks! It’s a holistic problem.
Many newer cars are expensive high tech pieces of junk anyway. Was in a wreck in April and thank goodness the kid who hit me had insurance, but of course they totaled my car. I mostly work from home and hubby is retired so we limped around with one car while I was stuck in analysis paralysis. Finally found the same make and model of my old 13 YO sedan, 10 years old, in pristine condition for $10K. Going to drive it til the wheels fall off, or some other jackwagon plows into me on the interstate.
Yes! Kept a 30 year mortgage for the flexibility in down times but paid it off making extra principal payments in just under 16 years. Lucky to have married a math person and I am a math person too. We hate debt and pay cash for cars (we make monthly payments to a car fund for big repairs or replace) and pay our CC balance in full every month.
Pretty much the same here. We refuse to carry debt, paid off the house in 19 yrs by doubling or paying extra, save and invest the rest. Less to worry about in todays uncertain times
I've been self employed for 25 years and hubby has been commission sales calling on retailers his whole career. Which means 'steady paycheck' has never been a thing. His big commission checks come when Christmas items ship out in Aug - Oct. My work is mostly project based. So may have years with multiple big projects and years where it's hit and miss. So we made the decision to lower our fixed costs so that a bad year or month meant we would at least have a roof over our heads. We'd been paying extra on principal all along but went scorched earth throwing every spare dime at it the last 3 years. Christmas after my parents sold their house and downsized they surprised my sisters and I each with a $5K check. That took us to less than $1K balance and boom we were done. So yeah, had a little help but it was mostly just frugal living and telling the kids and ourselves 'NO' to things that were 'wants' and not 'needs'.
Nice feeling isn't it??
Especially since property taxes and insurance has gone through the roof. Some friends still with mortgages are seeing escrow accounts balloon, and thus monthly payments go up by as much as $500 a month! We shopped our HO policy but still $1K a year more than 5 years ago and Property tax increased $1200 in one year, so not as bad as some, but still money you just kiss goodbye.
Yes I get that fully. We left Southern Maine and a home valued less than the one we purchased in West Virginia and our taxes there were $6800/yr. Here they are/were $3400 but there has been a huge influx of swamp people (from Washington DC) moving here making massive new developments and our taxes this year went to $4000 so sad. It is still much less than before. And there is no way for the average citizen to effect change.
It’s called living within your means and planning efficiently. Sounds like you’ve been an expert at doing both. I wish more people were able to take on those principles, especially young people who want instant gratification. Both of my girls are hard workers and they know where my husband and I came from, which was not much. They’ve seen an appreciate how hard we work for everything so I know that they will carry these forward
Both of us came from working class homes where stretching a dollar was a necessity. Internalized that, although we don't wash foil or re-use plastic bags, we do lots of frugal things just as a matter of course. Taught our kids the same. One is frugal and smart with money and the other is starting to come around after a decade of blowing money left and right.
I am with you on this. We are lulled into having to have everything at once. We got married and my wife's parents had a little cottage that they allowed us to stay in to save for a house of our own. I worked 2000 overtime hours in one year to save for the 20% down payment on our first home. It was a new modest 24X34 cape with only the first floor finished. It cost $54,000 on 3 acres in a new development. We worked hard had 2 children and 2 cars. My wife stayed home with the children. We finished off the house ourselves with outdoor improvements, 2nd floor and kids room in the basement. It was during 1983 and the interest rates for the Maine first home loan was 11.5% and we took a 15 yr loan with 20% down as required. We sold it for $110,000 7 years later and before it sold we took and equity loan of $40.000 to purchase a piece of land in a development closer to town, another 3 acres. We borrowed $125,000 to build our new 2.5 story colonial home and I was the general contractor. We ended up with that for 33 years with tons of upgrades and maintenance all in approx. $270,000. We received a small inheretance and paid it off right about 50 yrs old and the children had finished college. I believe we feel free not having a mortgage with a bank. We do not like to owe money. But the monkey on our back and every other land owners is the city or county property taxes, we never really own our property.
Thst was in the days that it wasn't exorbitant to buy a home.
We bought our home in 1990 when a 'good' interest rate was 11 3/4%. Before we re-financed, the payment was double what rent would have cost us. So it's all relative. Every generation has had it's challenges.
But what kind of soup Jenna? How about getting rid of the IRS and/or ending the unconstitutional federal income tax that steals my money on a daily basis and gives it to the biopharmaceutical military industrial complex and Israel?
Housing prices aren't going up. Our dollar is being inflated. This is the core problem that needs to be fixed, not introducing more vehicles of debt.
This is all purposeful. They don't want us owning our own properties and being self sufficient. They want us to rely on them so we can be easily controlled. You will own nothing and be happy.
I agree with much of what you said... but MY point was the outrage over 50 years v. 30 years. For some people (obviously not all), it won't make a lick of difference. And if they decided to NOT "introduce another vehicle of debt," that just means people continue to rent, and not even have a SHOT at owning. And yes, they may never own it... but their kids and grandkids might--which would NOT happen if they rented forever. Just saying. ;)
The biggest problem with longer term mortgages is that it benefits the banks more than the average person. Mortgages are front loaded debt vehicles, so we spend most of our money paying off just the interest of the loan in the first few years of the mortgage, so for 50 year mortgages, we would pay off very little of the principal in the first two decades. For most people who decide to move before the 10 year mark, that means they gained very little to no actual equity from the mortgage because all the money was spent towards interest instead of the price of the house.
The last thing we need is to give more money to the banksters. This is all on purpose though. Our society is being slowly flushed down the toilet so that we all become so desperate and dependent on government and end up in a situation where the vast majority of people will do the one thing they have been conditioned to do: beg big brother for help.
By the way, do you know how to tether off of your phone for internet so that you can continue using the internet from your laptop if your home internet goes down? If not, just enable the mobile Hotspot option and connect your computer to your phone's Hotspot connection. 🙂
Seriously though, what kind of soup?
BUT THE ALTERNATIVE IS GIVING MONEY TO LANDLORDS--WHO ARE BANKSTERS! You can't argue one and not acknowledge the other. You may not be hammering down principal in the early years, but you’re capturing the appreciation, which is where almost all real-world wealth in housing comes from. If a home goes up $40K, $80K, $120K in value over the years (which is extremely common), that’s your gain — not your landlord’s.
(AND YES I TRIED TO TETHER AND NOTHINGGGGGGGGG WORKED. HENCE THE SOUP. ;)
Yes, this is true, so what's worse, benefiting the landlord or benefiting the big banks? lol...
Either way, this 50 year mortgage nonsense is just a bandaid for a much bigger problem. I can appreciate the fact that the house appreciates in price, but that doesn't mean all that much if you're moving to a more expensive house that appreciated at the same rate, if not more.
You know what would help the average person more when it comes to mortgages? Fixed low interest rates. The banks will still make money, just less money. No one is going to feel bad for the banks except for the banksters.
If you need help with the tethering, feel free to message me Jenna. It should be a simple plug and play type feature.
Also, did you really make soup or did you just pour canned soup into a pot? I'm getting rather suspicious due to your lack of acknowledgement. 🤣
Even though it may benefit the banks more than the average person, it still would benefit the average person. So where's the harm? Nothing new in that. My Amazon purchases sure benefits Amazon and Bezos more than it benefits me, but hey—it still benefits me. :)
I see what you're saying.
There is a flaw in your argument.
House prices go up too.
So if your mortgage is 100,000 and house prices increase and you sell, in theory you'll make a heap.
House prices generally increase.
Of course if buying another house that house will have increased in price too
Unless you sell or move somewhere cheaper... or sell and then rent or live on a cruise ship... or you die and leave it to your kids... lots of options... ;)
Isn't it a thing in places like Japan?
It's not a flaw. It is how the mortgage works. We spend most, if not all of our mortgage payments towards interest in the first third of the mortgage. This period will naturally extend with a 50 year mortgage.
I totally get that the first couple of decades you’re paying interest only.
I understand that.
But the house is also increasing in value
So if you sold your house and there was money over you get that as well.
The reality is we have to live somewhere.
If you were paying rent it would cost more and get nothing back from any of it.
The 50 year mortgage gives you a place to live you can call your own which wouldn’t be as expensive as renting.
Yes, I agree that this is better than renting, but it's not much of a solution to the actual problem of inflation.
And when people realize that the "money" they were loaned is a bookkeeping entry by their bank (with little to no savings behind it) their heads will explode. It's the most crooked business in history--by a wide margin.
The extension to 50 years simply extends the bubble that the Fed has created. They could let prices revert to the mean, but then boomers (and I am one) would lose the equity they feel they've earned, banks would have to take losses as prices dropped, and the .gov loses out on some appreciation based taxes.
Final thought from me today? The next 50 years may look like the last 50, but it could also look very different. Interest rates tend to move in very long cycles. Appreciation in housing is not guaranteed.
Indeed, we LOST money on our first house in...wait for it...the wine country region of Sonoma County, CA. We paid about $150k for it back in 1993 and lost about $12k when we moved three years later for a job. "Value" of it now? $605k. Gen Z is screwed.
Tethering off your phone is great, assuming you live somewhere with cell service, which I don't.
Actually, my dh and I continue to discuss paying off our mortgage early, but we always decided against it. It just doesn't make sense when that extra 'payment' can be invested. We make more investing than the interest paid on the house. When we retire, the house will be/can be paid off and we'll have a bigger nest egg by waiting. Businesses leverage debt all the time. The true lack of property rights is property taxes. No matter the mortgage or not, we will always be renting to the government. And that's what's evil.
Let's get rid of property taxes while we're at it.
Couldn't have said it better myself.
"unconstitutional federal income tax." How is it unconstitutional? 16th Amendment. (Altho that is the only Amendment for which states, while permitted unlimited attempts at ratification, were prohibited from withdrawing ratification once made.)
Exactly. This was an amendment, which is not a part of the original constitution. It doesn't become lawful because the government makes it into a law.
I think it does become constitutional after surviving the rather high bar of amending the Constitution. In addition, the founders included two ways in which the Constitution can be amended. They wouldn't have provided for a way to make adjustments to the Constitution if they thought that amendments were ipso facto unconstitutional. I guess what confuses me is I can't see how an amendment "doesn't become lawful." Can you flesh that out for me?
So do I understand that you believe only the original Constitution is law, and not any of the amendments?
Laws today are just to maintain the modern slavery system. It doesn't matter if it's unconstitutional or not because that is subjective. The founders of this country did not tax wages and wages were never intended to be taxed. It should be evident to everyone now that laws exist to protect the wealthy and the powerful.
Rules for thee and not for me.
The Progressive Era gave us a bunch of really bad amendments. My all time unfavorite is popular election of senators. We'd be better off if the states still had representation in Congress.
I'm not so sure about that, as I would have not only 2 blue senators, but all my congress critters would also be blue. Crooked blue state. At least my state has several conservatives in congress due to popular election.
Let's not forget the inflation tax. Our money itself is very clearly unconstitutional.
❤️❤️!!!!
Home prices are indeed going up. The home price increases have far outpaced inflation. A home purchased in 1960 can today be sold for about 50% more (adjusted for inflation). A four bedroom home on a half acre lot purchased for $17,000 in 1960 (which would adjust to $183,000 in today's currency) these days sells for around $280,000; an increase of 53%.
Yes, there's 53% increase but compared to what? You're only evaluating the house price using US dollars which have devalued greatly over time. Compare the house price to the price of an ounce of gold and the picture is totally different.
Year...........House price.........Gold price...............Ozs. of gold to purchase
2024............$417,700.............$2,389.......................174
2014............$268,900.............$1266........................212
1960............$11,600...............$35.27.......................328
So what cost you 328 oz. of gold in 1960 will only return 174 oz. in 2024 if you sell it. If you had 328 oz. today you could buy almost two houses (or twice the size of the house). It's my opinion that inflation has masked the true value of assets. You (and most everyone in the comments here) see a larger number and assume that means a greater value, which on the first glance makes sense and I would do the same.
The economist, Thomas Sowell, enlightened my perspective on economics and one of his famous quotes is: "Compared to what?"
The 53% increase is compared to the inflation adjusted price from 1960. Unfortunately our money is fiat, so comparing the home prices to the contemporary value of gold is as irrelevant as comparing the home prices to the contemporary value of cigarettes or baseball bats.
Yes, using fiat dollars as the measure, 53% is correct.
I was on the fence about it, but thanks to your concise summary, I now think it looks like a win. Gracias, amiga.
I know a lot of us old folk who have paid our homes
Did you hobble down the driveway to put your last payment in the mailbox, with shaky fingers and a walker? Lol. JK
Actually paid off early. Saved and paid but times are different now. A 50 year mortgage at the rate younger folk are dropping over from vaccines not sure if a good idea.
Good point about them dropping over with the vaccines
Actually paid mine off early as well. And when I sold my home having put about $270000 into it I sold it 2 years ago for $730,000 and upgraded to a better home for $605,000 but in a more economical state.
I dunno…start w a 50 year if that gets you in…buy sell, buy sell, use profits to upgrade to a 30 year, maybe eventually a 15 year. It’s all a game. Like Jenna, I’ve made a lot buying and selling homes over the years and am now mortgage free. Equity is equity and it is all better than rent.
Ps. Glad you’re alive and well, Jenna! We did miss you this morning.
Exactly! It's a game. And no one is forcing anyone into this... but also, as I said, it's not like the alternative is "oh, you don't want a 50 year mortgage? okay here's a phat house with dirt cheap monthly payments and you can rent to own..." I'm not saying ALL THE OTHER STUFF ISN'T A HOT MESS, but I don't get the uproar over an option that *might* make sense for *some people.* #MyMortgageMyChoice hahahahaha
I especially appreciate you pointing out that our grandparents, parents and even some of us boomers lived a very different life style than today’s society. Imagine not having a cell phone bill (many are paying for family members). That alone is a lot of money that could go to a mortgage. What about cable & internet? Younger gens give boomers a bad rap because we are able to afford a home & might even have paid one off. They claim it was “easy” for us. Well, I packed a lunch for work each day, didn’t buy a $10 cup of coffee on the way in, colored my own hair, and had zero Door Dash! I went a solid year without eating out to save money for a down payment. Sometimes it comes down to what you’re willing to give up to get what you want.
Exactly!!! I lived in the crappiest apartments you could imagine in NYC, had roommates, took the subway or bus when everyone else took cabs, cooked at home (UNHEARD OF in NY) or if I did get takeout, I'd make it last for three meals! By the time I was thirty I'd saved nearly 100K and I never made more than $50K a year.
My daughter is still on our phone plan (she's married) and sends us a check every month. It's cheaper for her to stay on our plan than it is for her and her husband to get their own. So he sends his parents a check every month for his phone and she sends one to us. We would rather see them save that little bit every month than drop from our plans and increase their payments. My mother is on my sister's plan - because again, it's cheaper for her to be on a multi-person family plan than to be on one all her own. Sometimes combining stuff just makes more sense.
Totally agree. It’s a smart strategy and tons of people do this. My point was we didn’t used to even have cell phones so all that money could go to expenses, unlike today.
This is proof Trump could cure cancer, diabetes, autism and birth defects while walking on water, and the loonie left would wail loudly crying foul! They have no qualms with leasing a car that’s too expensive for them to buy and ending up with NOTHING, but a 50 year mortgage that builds at least some equity and gives them a yard of their own is heinous. The only other way is to lower interest rates a LOT (which Trump has no power over and the Dems don’t want) or lower the value of homes people have already purchased, wiping out their equity and causing everyone to be upside down in their mortgage. (Where is the “fair” in that?) We’ve seen what happens when the housing bubble bursts, and it’s not pretty. So kudos for Trump!
Tik Tok...the vast wasteland of irrelevant and ignorant opinions. I agree with your take on this, Jenna.
30 year mortgages aren't debt slavery? Seriously... unless you are like Jenna and hopping homes, it takes a damn long time (30 years) to pay off a 30 year mortgage (without accelerated payments).
Apparently I'm one of those weird people that will actually have my mortgage paid off in a few months. Sure I could take out a new mortgage and do something with the money to make more money (hey, my investments in Amazon and AMD have paid back far more than a 6% loan costs). But I really like the idea of only owing property tax! Ease of mind is worth something too!
Big Dave Ramsey fan, although I don't agree with him on everything, agree with his mantra of a paid off home being a way to avoid risk. Yes, you can get a 6% loan and then use the money to invest and make 10% or more but that introduces risk. Job loss, unexpected big expense, or any number of disasters can derail best laid plans. With a paid off home you have ZERO risk of foreclosure. (unless you don't pay your property tax, but at least without a mortgage payment you can save a little each month for that one) Paid off ours in 2005 and when the great recession happened we saw our home value drop, but it was purely a paper loss, no need to panic that we were 'upside down', like our neighbor, who did a big cash out refinance to remodel and then saw a job loss that meant she couldn't afford her payments. She just quit paying and squatted for 2 years before the mortgage company finally foreclosed. Walked away with half her stuff still in the house and someone came and loaded up multiple dumpsters afterwards. Horrible waste. I did nab the really nice planters in her back yard before the dumpster guys got to them, though.
Exactly! Life is full of risks. It's nice to be able to choose which ones you want. Feeling secure in a home feels good to me.
Especially if you take the time to read The Great Taking.
Sounds like an interesting new book.
It is, if also a bit terrifying. You can also find many video summaries on youtube.
I'm not a fan of video summaries.
Yay for the planter heist.
We have been skimping for almost 20 years in the home we are in. We started with a 40 yr mortgage. We refinanced to a 20 year at 2.5% about 5 years ago, but even with making an extra payment each year AND sending extra for principal each month, I do feel enslaved because we still have 13 years left on the loan and retirement is coming before that. I wish we could have just done a 20 year from the very beginning because ALL that interest we paid the first 15 years could have helped us instead knock down principal sooner and be free and clear today, and able to finally take vacations and actually enjoy life. But instead we are trapped.
But what has hurt us the most is the real estate taxes, which have almost tripled since we moved here. When people ask “then why didn’t you just double up payments to pay off your mortgage sooner?” I say it’s because of taxes. Right now our monthly tax bill is more than our mortgage. All our extra pay that COULD pay down the mortgage goes to that. We have paid over $250,000 in real estate taxes over the past 20 years. That could have paid off our home.
Also, we ended up with three children with disabilities and the medical expenses the entire time we raised them. You can’t plan in life for the unexpected expenses up ahead. Too many things out of your control can end up competing for your paycheck and that keeps you from being able to pay down a mortgage.
If the 50 year thing happens, I would say they need to change how it amortizes, because it would take 40 years before just half your payment starts to go to principal. 7 years??? In a 50 year loan you won’t have much of any paid equity at all, and would have to rely solely on market increases. BUT, those increases are eaten up by realtor fees.
There’s too many things in a 50 year that can keep someone from being financially free and own more of the equity in their home sooner, so yes, I believe it sets them up to be debt slaves.
Just my opinion. I see the “potential” for the other outcome but it is slim and not what the average lower-middle to middle class would face. Only wealthier people who earn more money would be able to overcome the negatives.
Ugh, Juju, that is a LOT. And I agree, the amortization would need to make sense. Again, just saying for SOME people it might not be the WORST option (when frankly the alternative is paying a slumlord forever...)...
And the private mortgage insurance PMI added to those who can’t put down - gulp- 20%. PMI should be dismissed, in my opinion it’s another form of robbery.
As long as there are real estate taxes you will never 'own' any real estate.
I hope I misread this. Any extra payments over the monthly payment must be marked as payment on principle. Otherwise, it will go to pay on interest while your principal continues to accumulate the same amount of interest. As you decrease your principal, the interest accumulated decreases.
Yes, it went to extra principal. We set it up that way. Yes we are finally past the 50/50 point but like I said it’s going to take more time for the principal to fall rapidly. The point I was making is real estate taxes and unexpected future medical bills (or other unforeseen financial circumstances,) can take away any ability to pay down the principal faster.
And if you try to flip houses these days, realtor fees are enormous. You have to have enough equity to cover those AND walk away with enough to invest again.
I think it will enable more young people to at least get their foot in the door of home ownership. What they choose to do with that opportunity is up to them. It’s all about choices. I also believe that only people be allowed to purchase, not corporations. I’ll bet people balked when the 30 year mortgage was talked about and eventually implemented. Just like what is taking place with the 50 year.
Good points Jenna that I hadn’t thought of. Longer mortgages could work for the more financially savvy & responsible. Trump has floated the idea of getting rid of capital gains tax on home sales. That would free up people to sell who might feel trapped in the big house & want to downsize for instance. It could increase inventory & lower prices. Having lower mortgage rates would help too. Anyone who was lucky enough to buy a home with a 3% mortgage rate isn’t going anywhere when current rates are more than double that. But first pass a law that doesn’t allow corporations to buy up & bid up property. Also on my wishlist is eliminating the property tax. I should live so long!
Our Christmas list, no capital gains on home sales, no corporations owning personal property and no property taxes.
Jenna,
Thank you for being the ONLY voice of reason I have read. Of course, I wholeheartedly agree with you. I think the people who decry this option are the rich snobs that don’t understand apartment dwelling and have become cold shells of what once were empathetic people who now reduce our lives to dollar signs and balance sheets. As Bill Cole says to Mr & Mrs Blandings about the building of their house, “some things you buy with your heart.”
My grandparents bought a modest 19th century farm house on over 65 acres, working farm with a barn, fields, pastures, a corn crib, etc sometime in 1930s. Oh, yeah, no running water or electricity which they installed themselves. I think the house came with “central heating” by shoveling coal into a huge furnace. No thermostat so sometimes windows went up in the dead of bitterly cold Western Pennsylvania winter. Hand pump out back door by the milk house. Best and coldest water ever! And by necessity they had an outdoor privy. Not fun in the winter! Got indoor plumbing in the 1970s!
They managed to raise five children and virtually raised me as both my parents worked. The happiest days of my childhood were spent on that farm and I’m grateful to my grandparents for finding a way to buy it. Children today deserve at least some memories of living in their own home with their own yard and own bedroom—not a noisy, unsettled apartment. May those children, whose parents are now able to buy a home, treasure their home. and learn gratitude for their childhood memories.
What is George Bailey’s rant about to Mr Potter about the people that drive the taxis and do manual labor do most of the living and dying in Bedford Falls deserve to raise their children in a clean house of their own rather than renting one of Potter’s slum houses? Jimmy Stewart delivers those lines with his signature squeak in his voice for emotional emphasis.
Oooooof I felt this in my bones! YES. I have so many memories of my grandparents' homes, much like yours, without all the "creature comforts" but did we care??? NO WE DID NOT! I could not agree more and love sharing these stories.
It’s a wonderful life!
Bill Cole’s quote came from Cary Grant and Myrna Loy’s “Mr Blandings Builds his Dream House.” Two great movies!
Thanks for that movie title - I'm going to go watch it! Thankfully it's available on YouTubeTV - the only subscription we have (because we don't pay for 5 streaming services!!).
It is a delightful comedy. I hope you enjoy it. Saw YouTube had it available but to rent. The Bill Cole quote is near the end of the movie after the house is built.
According to the JustWatch app, it's available with commercials if you have a YouTubeTV account (which we do).
Happy viewing!
Here’s my concern (MBA Finance, NYU Stern Business School, admittedly outdated!). The problem is the market always adjusts to the monthly payment. If the target buyer can afford $3,000 a month with a 30 year mortgage on a $500,000 house, then when 50 year mortgages are available then the price of the house will move to $570,000 to attract the $3,000 dollar a month buyer. The hidden truth is a 50 year mortgage will inflate housing prices. It doesn’t help.
I was pretty dumb in b-school and the only finance I did after I graduated is working on financial IT systems. I came away with something when it comes to car leasing. A lease is like a loan (mortgage) with no declared end date. So when I wanted to buy a spiffy BMW to be like the other wannabes in Los Angeles, I looked at the asking price, the interest rate I would pay on a six year loan, and what I should pay for two years of that loan (there were a couple of other factors . . . my only advice here is never buy down the loan, err lease, but put down as little as possible, like first and last). Anyway, the point being that a 50 year mortgage is like a lease, and leases allowed automobile dealerships to jack up prices to get more buyers (uhm, lessors) to buy cars they couldn’t afford but could afford if the loan was long enough. That’s why we’re looking at $40,000 entry level cars now. It will be the same with infinite mortgages (sorry again, I mean 50 year mortgages).
I don’t dismiss Jenna’s argument about getting one’s foot in the door. But you can do the same thing with a variable rate mortgage where the low 3 or 5 year initial rate qualifies you, but to avoid another 2007-8 collapse, you have to be a committed flipper, and only be a flipper if you enjoy moving. In my mind the cheap variable rate and the 50 year mortgage are functionally equivalent. for the first 5 or 10 years you won’t make much of a dent in paying down the loan so you’ll have to be betting on appreciation. If the 50 year mortgages tempts home builders and investors to increase the housing stock, prices will stagnate (I know that’s hard to believe, but supply and demand is the one aspect of economics that works almost all the time), and you won’t be reap the rewards of home ownership as readily as 15 or even 30 year mortgages homeowners have somewhat historically benefited from.
I was able to lease the kinds of cars I really couldn’t have afforded to buy and cars depreciate very quickly, so I’ve never looked at them as an investment and always assumed my cost of transportation was an expense and not an investment. A house is a place to call home and raise a family in and hopefully, by keeping up with maintenance and paying down the mortgage as quickly as possible, it will provide a place for a comfortable and enjoyable and stress free retirement. I’m happy to answer any questions if my little editorial on 50 year mortgages wasn’t sufficiently clear (and it likely has some holes so I won’t be offended if anyone points them out!)