Submitted 2 months ago by MTZ@lemmy.world to [deleted]
https://lemmy.world/pictrs/image/a08bbab1-f29f-4a7f-8923-ff86c0f1efba.jpeg
My favorite part of this whole 50 year mortgage thing is the shock that you’d pay like $1.7m for a $400k house over the 50 years while not batting an eye at paying $900k for a $400k house over 30. It’s even funnier because houses don’t have a set value, can change on a whim and have become a path to wealth instead of the necessity that is shelter.
The quality of the materials and the precision of the build has gone down while the prices rise, and everyone’s like “oh this sucks, but the market”.
At least cars are considered a valid housing choice these days, which is why car prices are rising.
Honestly, I thought it is actually not allowed in a lot of states to live in your car.
So that’s why PC cases have gotten so expensive.
Like stocks, and art, they’re only as valuable as what people will pay for them.
If you want a shelter, you can use sticks and leaves in the forest and build something halfway decent at least. If you want a building to call your home, pay up dickhead.
Meanwhile, people who should be buying are renting, people who should be renting are in airbnbs or living in their cars, and the family dwellings are owned either by some jerkwad who wanted an income property, or a corporation that just felt like owning more land because they could.
I’m so proud of our society. Such progress! Capitalism is great!
If you want a shelter, you can use sticks and leaves in the forest and build something halfway decent at least.
Wrong, someone owns the forest and your encampment will be destroyed upon discovery.
“Like stocks, and art, they’re only as valuable as what people will pay for them.” Except this only takes into consideration what the rich will pay and that sets the “value”. I’m a people and my value for things is super low.
So I did the math. A 30 year fixed and a 50 year fixed have a monthly payment difference of $1.
What the absolute fuck.
Because for the first lot of years you are paying basically 0 principal
I owned my first house for 19 years, which was purchased in the fall of 2006. We sold it for the exact same price as we paid for it, and barely came out ahead. I know it was poor timing, but the idea of leaving a home and using it as part of your retirement income is a lie. The banks are laughing all the way to the bank.
You’re right, but he did say the monthly payment was the difference, not the interest payments. That typically doesn’t change throughout the life of the loan. I wonder what the math formula looks like for a 50 year fixed?
What?
Some random numbers that are of course VERY variable, but I just ran the calcs with 400k, 5% down, 6% APR for 30 and 50 years
$2648 for 30 years $2369 for 50
Now that is of course not a great deal, presumably you’d also get a little better rate for the longer loan (more points) but it’s not a dollar.
Don’t forget that on top of all of that you have to pay property taxes.
I just question if the 50 is getting the same rate as the 30. Obviously, all else equal, math is math. Banks see that $300 savings as a potential extra $150 a month.
This raises questions about the opportunity cost of $300/mo. It’s not a huge amount of money, but for some budgets, it might make a car payment or groceries possible. Or, if saved or invested wisely, would it tip things in favor of the 50-year term?
Yeah I compared some numbers and guessed a plausible interest rate for the 50 year based on the 15 vs 30 year interest rates at a couple of real banks near me
50 years at 6% with 5% down on 200k (fairly plausible for a decent home where I live and realistic for a first time home buyer who 50 year mortgages are clearly catering to) is 1k/mo almost exactly
30 years at 5.85% is 1,121/mo 20 years at 5.75% is 1,334/mo 15 years at 5.50% is 1,553/mo
So the difference is pretty small on a realistic first time home buyer’s home, but having been on the edge of approval for a home loan before that $100/month can absolutely be the difference between getting the home now and having to wait another 2-4 years depending on markets. In my case they assumed my insurance would cost more and that actually made all of the difference in my home loan application because that shaved about $100 per month off
One interesting side note, one of the local credit unions I looked at offers different interest rates depending on the value of the loan! For a 30 year fixed loan they offer the following rates:
800k or less: 6% 300k or less: 5.875% 200k or less: 5.875% (presumably they have this bracket for future rate changes) 100k or less: 5.75%
So yeah that’s new! I’ve not seen that before!
With this math I just acquired a 10 year fixed for $1 more per month.
Why would anyone take one out in that case then? You can always overpay and pay it off sooner though.
A 50 year mortgage will be a lot like renting. Because the bank will own your shit until you die.
That’s what we get for saying “why can’t I get a mortgage when I pay more in rent just bc my credit is bad”, the banks figured out how to rent properties to you.
Headline: Save 200 dollars a month with a 50 year mortgage over a 30 year!
Subtext: … and end up paying double the interest to us for the benefit, and die before your loan is paid off so we get to take the house back from your corpse, sell it on the cheap to a corporate real-estate investment firm (that we have stock in) for just enough to cover the remaining mortgage balance. They’ll turn your multi-generational family home into a shitty rental property or leave it empty to keep the rest of their rents high and your children get nothing cuz fuck em!
Bank workers are, at best, getting a small bonus when you sign that mortgage. Your fellow worker isn’t the enemy.
These are the financial professionals that normal people should be able to trust to make important decisions.
I mean… They’re salesmen more than trustworthy professionals.
I see your point but the main issue is that nobody should ever trust the seller of anything to give them the info they need.
People should only ever trust trustworthy independent third parties… But those are hard to find.
I really don’t know what the solution is besides getting a better education, and I don’t mean a crap degree, I mean some more tangibile subjects in lower levels of school. I don’t blame them lightly, but people that accept this kind of thing aren’t the brightest.
No, they’re not. A lot of them don’t even have a degree in anything.
Your personal financial advisor is a person you should be able to trust with your important financial decision. They guy at the bank handing you a contract to sign is a bank employee with a script on rails, a manager, and a commission structure.
In a better world it wouldn’t be like that but in a better world I don’t think I’d be going to a bank in the first place.
financial professionals that normal people should be able to trust
wew.
I’d like to differ. They are the ones selling you this slavery contract and probably don’t mention the impossible to deal with interest.
A bank worker who is not your enemy would suggest you to switch banks or give you a reasonable contract. Of course depending on bank they might lose their job over the last one.
No, it’s mean that the issue is not the workers, but the bankS. Or to be be even more concrete : the system that produce institutions with the function of bank. Opposing to those workers would not make a change; maybe you could make them fired, and others could take the place, but our choice wouldn’t make much difference compare to those of the employers in the bank industries. We could argue that opposing to one bank is the same; at most it could bankrupt (ironically), but other bank would take they function.
That why this is the whole industry we shall oppose to, to against one bank, but against all of then. This is why people in revolutionary union organize by industry, and not by firm or professions. Helping workers in the bank industries getting less hour/day, less harassement and better stability would make the situation where they could diminish or abolish the predation of their employers against others (that are not only customers). We couldn’t expect solidarity from people we are not solidaire to.
This is not about right or wrong, this is about effectiveness.
The Nürnberger defense.
Yeah every commissioned salesperson you don’t like is literally nazi ss. Go off, moron.
Banks are capitalist AF. Literally the heart of capitalism.
Pretty disgusting to hear these leeches framed as “workers”.
The guy who facilitates your mortgage contract isn’t getting your mortgage payments. The corporation that employs them is. The guy is making a wage or maybe just an hourly salary, plus commission.
By your logic, the checkout worker at costco is skimming off your wages to gate your access to food and clothing.
Even a sleezy car salesman who is trained to convince you to sign an extortive contract isn’t oppressing you. He isn’t betraying you at a class level. His plight is exactly the same as yours.
Bro, do you really think the owning class is the one on the other side of the desk when you sign the paper? No, it’s another peon like you or me.
Have some fucking class solidarity
I can’t believe this is real.
Home ownership out of reach? No problem, just never own a home. Bing bang boom.
I’m European so I’m out of the loop. Do you actually have 17% interest rates? I’m getting 2% over here.
Thankfully no. I think they’re more like 5.5-6% currently. Back in 2020 I managed to get a 2.375%.
The american dream of home ownership is rooted in settler colonialism, and used as a tool to keep workers in debt and afraid to take risks organising
The Pueblo, Iroquois, and other non-nomadic Native American groups might disagree about the colonialism part.
Right that’s why no other country had dreams of home ownership.
American exceptionalism really did a number on you guys!
A 350k house assuming the national average on taxes and interest rates comes out to just shy of 1 million dollars. Over 650k in interest. The payment is $1700 which to put it in perspective my home was 260k at 2.8% interest and my payment is $1830 on a 30 year mortgage.
I mean honestly good luck finding a 350,000 home. Even the homes that are 40 years old in my area are selling for 4 to 500,000. The new home build s are averaging 400 to $450,000 to start. So getting a home at $260,000 that you got would be a dream.
Usually folks signing a very high interest mortgage do so to snag property while prices are down due to the rough market then will refinance in 2-5 years when rates are lower.
As long as homes are investments, buying a home as soon as you can regardless of interest rate is the most accessible path to financial success for the average middle class American
For one thing, when you buy a home you’re basically locking in your home payment for decades. A 30 year mortgage originated in 1998 would have the exact same payment this month as it did in 1998. Unless of course you pull equity out of the home in a HELOC or refinance but that’s generally not a good idea anyways since you’re trading long term wealth for short term cash, and that’s basically always a path to economic ruin. Point is though, whatever payment you lock in with your initial mortgage it’s not going to change significantly until the mortgage is fully paid off. Even if you refinance, even considering property tax changes, your home costs are largely not going to increase. About the only wildcard is insurance which those rates are mostly determined by the risk of property loss, so as long as you don’t live somewhere that is at relatively high flood, fire or hurricane risk you’ll probably not see a dramatic increase
Is that on the 17% joke rate?
I would rather eat my own children than sell them out to the future the banks have in mind.
These people have abandoned humanity.
These people have abandoned humanity.
Well fucking said.
So… how was your vasectomy?
Modesty
These people have abandoned humanity.
I wish they would abandon Earth too.
Is this an actual thing in the us? We don’t have 50 year mortgages in Denmark but I can get a 30 year fixed interest at 3.5%
trump just announced 50 year mortgages
this is so awesome I can’t wait to be in debt my entire life
No, but our Treasury Secretary recently floated the idea. I believe there are already some 40-year mortgages, but they’re rare. The 30-year mortgage has been an American institution since it was standardized under FDR’s New Deal.
Not a thing yet AFAIK, but Trump proposed the idea this week. You can get 30-year ones here in Canada too, but I’m not sure what the lowest fixed interest rate is currently.
Well, the USA has 96 month automobile loans and this kind of shit does not surprise me. None of the asswipes in DC are discussing the piss poor income distribution in the USA which leads to affordability and a decent middle class life. In 1789, the French were 100% correct.
I’ll counter with a 100 year 2% mortgage
Anybody who believes a 50 year mortgage is a good idea, does not understand discount rates…
A mortgage that lasts longer than your career is how you build generational debt.
In Australia the Average mortgage loan term is over 30 years but the average duration before its paid out or refinanced is only 8 years. Id be more worried about the terms and conditions surrounding early payout and refinancing than the theoretical maximum term of the loan on paper because if they want to be truly predatory thats where it will be hiding.
At this point I’m just buying an RV.
Also, if the dealership is offering you 29% on a 7 year loan, please walk away. Stop giving in to that shit. It’s better for you, and it’s better for the rest of us.
I’m gonna be dead in 20 years, so I’m so sorry to have to turn this down lol
So why do houses exist if nobody can have one?
Life hack for renters: You can just steal from the bank.
We laugh at this, but the older generations still remember when the mortgage interest was this high. I don’t know where you guys are from, but there is an old news reel from the 1970s here in Ireland when young families at the time complained of “high” house prices of up to 72,000 pounds, with mortgage interest of 14%. The folks on social media had their jaws dropped on learning of how high the interest rate was, but how cheap the overall property value was back then. Now how much are those houses at the moment? They are now worth between €690,000 to €1.5 million. High valuation but the interest rate is down in proportion. In any case, only few could afford to buy houses due to inflation and wages haven’t kept up with it.
They actually ended up getting married after that hug.
guess it’s time to start planning my great-grandkids’ mortgage payments now. gotta secure that intergenerational debt early.
Such a stupid, stupid society.
Subprime Rides Again, baby.
I bought a fairly cheap house and paid it off as fast as I could.
Could I have made more by investing that money instead of shoving it into a mortgage? Maybe.
But you can’t live in an investment account. When the markets take a shit, you don’t lose a room from your house. And when it’s paid off, your outgoings are basically food, electricity and internet.
Why does he suddenly have vampire teeth
I’ll take a 90% 1,000 year loan please.
Is the image AI? The face of the guy to the left is kinda weirdly focused.
Makeitstop@lemmy.world 2 months ago
Average age of a first time homebuyer is now over 40. Even at a reasonable interest rate, most buyers would die before they actually own the house.
DioramaOfShit@lemmy.world 2 months ago
As intended
kautau@lemmy.world 2 months ago
Can’t pass it on to your kids when the bank forcloses on it
iAmTheTot@sh.itjust.works 2 months ago
Late stage capitalism demands that you will own nothing.
UltraGiGaGigantic@lemmy.ml 2 months ago
For now… until they want you to have less. For fun this time.
partial_accumen@lemmy.world 2 months ago
I know someone living in the Netherlands (home of Lemmy.world!) that told me they had interest only mortgages that didn’t pay toward the principal and that this was common over there. It seems like these new 50 year mortgages in the USA are a step going that same way. Anyone from that area confirm this?
KoboldCoterie@pawb.social 2 months ago
At that point, the bank is buying the house, they’re just renting it to you for a very cheap rate. The “purchase” is just you entering into a long-term rental agreement.
nonagonOrc@lemmy.world 2 months ago
I’m Dutch, just bought a home, and I’ve never heard of that. I personally don’t buy that story.
gergolippai@lemmy.world 2 months ago
Dutchie here, nope. We are paying both principal and interest. Plus when i to it out, my mortgage was 102% of my home’s value. And as it stands, the bank owns my ass exactly until I retire 🤷♂️
greygore@lemmy.world 2 months ago
Not sure if this is what they were talking about, but balloon mortgages are a thing here too. I can’t ever imagine considering one, but they exist.
AtariDump@lemmy.world 2 months ago
Screw .world
ivanafterall@lemmy.world 2 months ago
How would that work, even on paper? Not being a dick, just don’t understand. So it’s literally just, “you can never own this property fully?”
MystikIncarnate@lemmy.ca 2 months ago
The year I turned 40, was the year I moved into my first non-rental property.
I’m living proof that shit is fucked up
ivanafterall@lemmy.world 2 months ago
I’m turning 40 in a few days. I finally moved into a crazy beat-up fixer-upper/possible crime scene about 3 weeks ago.
TastyWheat@lemmy.world 2 months ago
I’m a couple of years older and JUST escaped renting. It’s ridiculous!
Diplomjodler3@lemmy.world 2 months ago
And then their kids keep paying until they die and still haven’t paid it off, even though they’ll have paid twice the original amount by that point. Whoever came up with this bullshit is probably right now buying their third yacht from the bonus.
gibmiser@lemmy.world 2 months ago
30 year mortgage means you pay for the house twice with interest. 50 year mortgage means paying for the house 3x.
Fredselfish@lemmy.world 2 months ago
So basically you won’t own shit.
MystikIncarnate@lemmy.ca 2 months ago
Never did.