No to 40 Year Mortgages

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Episode Transcript

Speaker 1 (00:00):
No, no, hell no. President Trump now in his economic
inner circle, have now come out with a serious proposal.
At least they're looking at it very seriously to allow
for fifty year mortgages, especially for first time home buyers.

(00:20):
And the reason why is obvious. The country is still
facing an affordability crisis. Republicans, even frankly, Trump's people, are
very worried that Democrats did very well in the recent
elections Virginia, New Jersey. Mamdani in New York City on
the affordability issue, and one of the top affordability issues

(00:43):
for many Americans the cost of buying a home, the
cost of rent housing. For many young people, buying a
home is now considered out of reach. In fact, the
average home first time home buyer is now forty years old.
In many cases, some are forty two, forty three, even

(01:06):
forty five. Just forty years ago. When I was growing
up in the nineteen eighties, it was twenty eight years old.
So clearly people are struggling to get that first home.
And it's no wonder prices, the cost of buying a
home has exploded, and so Trump and his people believe,

(01:28):
don't do a fifteen or a thirty year mortgage, extend
it to a fifty year mortgage, and what this will
do by extending the life of the loan is drive
down monthly payments. And so here is the math. The
average median home in America, not in Boston obviously, or
New York or some of these big urban areas, but

(01:51):
across America is four hundred and fifteen thousand dollars. That's
the average price for a median home. If you were
to put that on a thirty year mortgage, as is
traditionally done, it's two thousand bullpark two thousand, five hundred
dollars a month. Extend that to a fifty year mortgage,

(02:11):
it's two thousand and eight hundred and eighty eight dollars.
So basically you're looking at a savings of about two
hundred and twelve dollars, about two hundred and twenty bucks.
It's nice, it lowers the payment, makes it a little
bit more reasonable. But as I said on the show,

(02:33):
and I want to repeat it, is two hundred bucks
really the difference between somebody getting into a home or not.
I don't think so. The problem is that the prices
of homes are way too expensive in Boston nothing less
than seven eight nine hundred thousand dollars. You're getting a shack.

(02:56):
You're getting a shack. So the cost of home are
too high. Interest rates are way too high. Illegal immigration
has is driving up rents to exorbitant levels. Who can
pay three thousand, three hundred, five hundred three thousand, five
hundred four thousand dollars to rent an apartment only illegals

(03:18):
with housing vouchers, many of them two to three families
into one bedroom, into one apartment with two or three bedrooms.
That's the problem that we face. And this is to
me a band aid because the other side of the
story is, yes, you pay less about two hundred, two
hundred and fifty dollars a month on your mortgage every month,

(03:42):
but in terms of interest, the interest is much higher
on a fifty year home fifty year mortgage than on
a thirty year mortgage. And take that four hundred and
fifteen thousand dollars average median home, it adds three hundred
and seventy nine thousand dollars in interest. Basically, you're buying

(04:05):
not a four hundred thousand dollar home, but an eight
hundred thousand dollars a home. When you look at the
interest that you have to pay over the life of
the loan. My friends, it's a royal ripoff. And in
the end, the only people that really win is not you,
is not me, is not the average consumer. The banks.

(04:29):
The banks make money either way, you'd pay the life
of the loan. They've made up. They made out like bandits,
almost four hundred thousand dollars on a four hundred thousand
dollars loan. But let's say you don't make your payments.
That they're putting people in homes who they just can't

(04:49):
make the monthly payment. Over the long term, what happens
does the bank eat the costs when they foreclose, When
say you can't make your month payment and they stop
making their payments and people people in the home just
leave or abandon their homes. No, the government will backstop

(05:10):
it because these are higher risk loans. The taxpayer ends
up footing the bill. So either way, the banks make money.
My friends, I was brought up the old fashioned way.
Don't pile up debt. If you have to get a mortgage,

(05:33):
get a shorter mortgage, get more aggressive payments, pay off
your home as quickly as possible. Live debt free. You
buy a car, you need a loan, pay it off
in five years. Don't take out a ten year loan
and pay a lot more in interest, because by the
time the ten years is up, usually the car doesn't

(05:55):
work anymore and you're still left having to pay the loan.
Live debt free. That's the problem here in America. We're
becoming addicted to debt. Mortgage debt, car debt, credit card debt,
you name it, and debt makes you a slave. To

(06:17):
President Trump, this is a bad idea. You want to
allow lower housing costs, very simple, Get rid of Jerome Powell,
fire him as the Federal Reserve chairman, Replace him with
someone who will lower the interest rates not a little bit,
but substantially, deport the twenty million illegals. That will stop

(06:40):
the massive pressure on rental prices and also housing prices,
and get rid of the crippling environmental regulations that make
home building so expensive and so difficult. What we need
is more supply. We need more apartment build bildings, more condominiums,

(07:02):
more homes, more housing. That's what's going to lower the
price and make things more affordable. Not a fifty year loan.
I mean, hell, at this point, why stop at fifty
Why don't you make it a seventy five year loan.
Make it a hundred year loan. Hell, make it a

(07:23):
two hundred year loan. Indenture the kids and the grandkids
to pay for somebody's to pay for our mortgages. In
other words, we've got to stop the addiction to debt.
And really, when everything is said and done, is two
hundred dollars the difference between you getting into a home

(07:44):
or not. I don't know about you, but three thousand
dollars for an apartment or three thousand, five hundred or
four thousand. It's too much. It's too much. So no,
I don't need a fifty year mortgage. What I need
is someone that will actually bring the cost of homes much, much,

(08:11):
much lower, And that comes down to getting rid of
the illegals, bolstering supply, and bringing down interest rates. Mister President,
I love you, but on this fifty year mortgage plan,
I'm out.