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Let’s Talk Housing. And Trump’s 50-Year Mortgages.
Purchase activity perked up in US housing over the last week. That's good news from an otherwise fro
Ha! I was wondering who had tricked Trump into calling FDR a “Great American President.”
I think Pulte knows how mortgages work. He also knows what sells more houses.
Here is what an AI search said about borrowing $400,000 for 30 vs. 50 years:
It takes 30 years to accumulate $100,000 of equity under a 50 year loan vs. 12-13 years under a 30 year mortgage. Total interest paid is
$542,064 and $1,012,478 for a 30 year and 50 year mortgage, respectively.
“All it means is you pay less per month.”
The assumption that there is a lower payment rests on the assumption that the interest rate for the 30 and 50 year mortgages is the same. That will not be the case.
Trump want the economy to look prosperous under his watch. Borrowing for 50years, borrowing against crypto gypo investments, any ideas to get more houses sold, so the numbers appear greater than Biden’s numbers, he will jump at !
That Wonka line…classic.
I was anticipating we would hear about 40-year mortgages soon enough, as they are common in some other countries, but 50-years was a surprise. Prior to FDR, home loans were typically 5 or 10-year loans. You put 40-50 percent down, made interest only payments, and then had a “balloon payment” of the remaining balance due at the back-end. Interest rates were often variable, and under that system home ownership rates were rather low. The “modern” 15 or 30-year fixed-rate mortgage was a vast improvement.