Trump Proposes Idea of 50 Year Home Loan

Episode Transcript

Speaker 1 (00:00):
One thing that is I guess interpreted as a negative
is I have bills to pay. I bought my first
house when I was twenty nine going on thirty.

Speaker 2 (00:16):
It's almost thirty when I bought the house.

Speaker 1 (00:19):
I only say that because I was renting from the
time I was like twenty one. I had room and
board for my first three years of college, and then
my senior year I shared an apartment with a bunch
of guys.

Speaker 2 (00:33):
I think our rent was it was a three bedroom apartment.

Speaker 1 (00:36):
It was a small place, but we had four other
guys living with me, so we all split it the
same and I think it was something like one thousand dollars. Yeah,
I know, crazy, right, three bedroom apartment for one thousand
dollars now would be insane, But I was in a
small town college place, and yeah, paying two hundred dollars

(00:56):
a month to live a bad.

Speaker 3 (01:00):
Well.

Speaker 1 (01:01):
As I went forward in my life, you know that
price got bigger and bigger. I started to pay five hundred,
eight hundred. Eventually, when I got married and my wife
and I moved to the Des Moines suburbs, we lived
in a really nice place, but we rented, and it
was about thirteen hundred a month, and then we had
a couple of dogs, so it's a little bit more

(01:22):
expensive for.

Speaker 2 (01:23):
The dog fee. I didn't mind, didn't mind.

Speaker 1 (01:27):
I was totally okay with paying that price because I
am a big believer of you get what you pay for.

Speaker 4 (01:32):
Now.

Speaker 1 (01:33):
Maybe it's just me and my lack of knowledge about
these types of things, but I really hoped that I
could just manage whatever that price is. Whether they locked
me in for that or froze that, I didn't care.
I was happy living there. But when COVID hit all
of a sudden, it gave you a little bit of

(01:53):
a you know, maybe buying a house isn't such a
bad IDEA. Kind of a sad appendage to this story
is my first two greyhounds died within a month of
each other, which was really really sad. It was pretty traumatic.
But when we had to make the call to have

(02:15):
our second guy put down, the way we kind of
grieved was we went house shopping. We're like, let's try
the house shopping thing. That's when we learned about interest rates.
That was when we learned about where the market was
and how it had cratered at the beginning of COVID
and our realtor was kind of like, you guys are

(02:35):
actually getting in at like the perfect time you were
going to get a great value on a home, and
the market hasn't rebounded yet. We beat the market rebounding
by like a couple of months, I think. But it
was great in the house. We liked the yard. There
were things like the deck was. We liked the deck.
We had no idea how bad the deck was. It

(02:57):
was actually not in great shape, and we had to
do some some real yanky upgrades to get it to
do what we wanted it to do.

Speaker 2 (03:05):
Kind of thing.

Speaker 1 (03:07):
But I will tell you through and through more than
anything else, that there is a there's a piece of
me right that wishes I could do that one over
again because of the rates, because of what I learned
in that process, and how quickly it all changed. When
you sign the dotted line for a twenty or thirty

(03:30):
year mortgage, kind of like, wow, that's a long time.
You don't have a concept of how expensive a house
is until you start thinking about how long it will
take for you to pay that off at the price
you agree to. There are many people who I think

(03:52):
would give you advice that would be very different. Some
people would say, oh, yeah, you should get the shortest
mortgage that you feel comfortable with the monthly payment and
maybe even pay more than now rate if you have
a little bit of extra, and get yourself out of
that debt as quickly as possible. And then there're gonna

(04:13):
be people that are saying this new fifty more year
mortgage idea, which is something that again just kind of
is a mind blowing concept to me, a fifty year mortgage,
Like who is even living in these houses for this long?
And how it all works right, so you're not really
owning it, right, You never really quite get it all

(04:35):
to yourself. Now, you can make upgrades to it because
it is your house, but you're basically trying to play
that market. You're trying to you know, and I'm not
a house flipping expert. I kind of dabbled in the
ideas like, wow, this could be a lot of fun
to just like flip something and try to make money.
And then you realize how much work that is and
how much you know, free time, Like you get no

(04:57):
free time, I mean that is your entire life is
whatever you're done doing what you're doing for your real job.
Then you go and do that. You're trying to flip that.
Unless you can find a way to be successful enough
and get enough capital to make that your normal, regular,
everyday gig, then I mean that's going to just consume
your life. I'm not a handy enough guy for that

(05:18):
to be the case. I'm gonna have to have multiple
people helping me out. So now all of a sudden,
you're you're gonna have to pay some people. Would it
be easier to live for, especially first time home buyers
in this country, if we developed a fifty year mortgage?
So would you be in for this? I mean, we

(05:40):
could talk about the details a bit. How much would
we be saving on a month to month basis while
also just kind of kicking that down the road a
little bit more, And obviously you'd be paying more altogether
if you're on the hook. Let's say you miraculously do
live in your house for fifty years when you finally
pay that off, how much actually did you pay versus

(06:02):
how much you would have paid if you would have
stuck with your thirty year mortgage. I'm curious as to
how you feel about this, because I see a lot
of Republicans, a lot of conservatives saying this is actually
not a great idea. This is not the way we
want things to go. We do not want to beat
telling people, yeah, go into debt for twenty additional years,

(06:23):
and what that would do for maybe your pocketbook immediately
versus what that could potentially do down the line. The
idea and the concept of having anything on my bills
for fifty years sounds clinically insane from what I know
about debt. But I do know that what I'm hearing
from a lot of different people is that, at least

(06:45):
on social media, not anybody I know, but some people
on social media says this is actually going to make
it a bit easier for young people to go through
home ownership instead of renting themselves into oblivion. Well, phone
lines are open. I'd love, you know, the more educated
takes that can help me out. And then people, you know,
I'm sitting here, I'm just like, this seems unfathomable to
me and certainly wouldn't be something I'd be looking to do.

(07:07):
But maybe somebody can explain why this is or isn't
a good idea. Four two, five, five, eight, eleven ten
is the number here for the conversation. Joe's on the
loan line today. Welcome in, Joe. What's on your mind?

Speaker 5 (07:18):
Hi?

Speaker 6 (07:18):
Hi, wady to do it?

Speaker 2 (07:20):
I'm great.

Speaker 6 (07:21):
Well, you know, you still got an ace in the hole,
and if the banks are going to lower the rate
and raise the time, that's fine. But you still got
that ace in the hole that you can pay that
pay that principle down. My wife and I done that.
We knocked ten years off of our loan. We had
a thirty year nil. Every year when we got our
income tax back, we slammed it against the principle. Now,

(07:45):
the banks aren't going to tell you to do that,
but you can do that, and it's perfectly legal. So
in the fact that the I'm going to lower the rates,
that's a plus for you. And if you can, if
you can be disciplined enough to take any spare money
that you have and put it against that principle, you
will be amazed at the amount of time it will

(08:06):
knock off.

Speaker 1 (08:07):
So can I ask about how much time you saved
on that, Joe?

Speaker 6 (08:12):
We saved ten years?

Speaker 2 (08:14):
Ten years? Wow? Was it a thirty year mortgage?

Speaker 6 (08:19):
Thirty year note? Yes?

Speaker 2 (08:20):
Okay, wow, very interesting.

Speaker 6 (08:22):
Took everything that we got back from Uncle Sam plus
any extra moneies that we had that we didn't need,
and we've we've always put it against that principle.

Speaker 2 (08:32):
Interesting.

Speaker 1 (08:33):
That's a very impressive Joe. I appreciate you sharing that
with me today. Thanks so much.

Speaker 6 (08:37):
You bet you be all right.

Speaker 1 (08:38):
We got Cody on the phone line at four oh two, five,
five eleven ten.

Speaker 2 (08:42):
Welcome to our show, Cody. What's say you about this?

Speaker 6 (08:46):
Hey?

Speaker 7 (08:46):
So this is kind of where I stand on it.
By no means of my mortgage expert, I bought my
first out six years ago. Seven years ago now, actually
my wife and I we were nineteen now when we
bought the house. It was it was just before COVID.
The market had kind of just started to pick up.

(09:08):
But by no means was it what it is today.
We paid We bought a house for one hundred and
forty thousand, and we got an interest rate at four
point five percent at the time, which was average yeah,
thirty year Note the mortgage payment I believe was about
eight hundred and fifteen dollars a month, just the mortgage,

(09:30):
not the not the escrow, so no taxes, no insurance
in that I'd pay that separately. When COVID hit an
interest rates drops. We refinanced at two percent. When when
I did that, they offered me a They said, well,
do you want to go fifteen or another thirty? And
I kind of laughed and I went there, Well, I'm

(09:51):
sure there's no way I can afford the fifteen year note.
But just you know, for giggles, let's let's hear it,
it was one hundred and fifty more a month at
two percent, and so just think for one hundred and
fifty dollars more a month, i'd owned my house twice
the SAX. Yeah, so that's what we went with. And

(10:16):
I mean, it's kind of crazy, how you know. It's
I don't know exactly how much they're talking about lower
in the rate for this fifty year note, but it
just seems crazy to me because the amount of interest
that you can rack up over time can be substantial.
You know, I haven't done the exact mass, but I
think just doing the fifteen year NOE over the thirty

(10:41):
probably saved me. It had to be close to somewhere
between eighty one dollars.

Speaker 1 (10:46):
Well, yeah, and I'm looking at this, you know, somebody,
I have this calculator and I put put it in here,
and if you bought a four hundred thousand dollars home
and you had ten percent down, so you needed the
three hundred sixty thousand dollars loan for this. If you
were stuck at a six point twenty five percent rate,

(11:07):
you would save just about two hundred and fifty dollars
a month if you did the fifty years cent of
the thirty year and you knocked twenty years off of
the note for two hundred and fifty dollars. If you're
buying a house, if you're asking for a three hundred
and sixty thousand dollars loan, which I don't know where
other people come from, but that's an expensive house to me.

Speaker 2 (11:27):
That is a very expensive house to me.

Speaker 1 (11:30):
I can tell you this, two hundred and fifty dollars
a month is not enough for me to want to
kick this twenty years down the line, right, So I think.

Speaker 7 (11:38):
You can come up with that one way or another.

Speaker 2 (11:41):
Yeah, exactly.

Speaker 1 (11:41):
And to your point, you know, the option to refinance,
you just got to kind of lock into that, right,
You just got to lock into it and understand that
you can do better than even the note that you
signed by putting additional monies at your principle. So I
find it quite fat that all of a sudden incentive

(12:02):
just better education about the process the answer. And again
I'm not saying that Trump and the people who you
know are trying to put this together don't have a
good idea at heart to try to get people to
you know, own more. But I also just think that
this is a really bad idea to suggest that this
is some sort of easy out for people who are
looking to buy their first home and may not have

(12:22):
the ability to pay it all, you know, or have
a giant down payment. It doesn't make a lot of
sense to me. Cody, good stuff. Thanks for the call today, Man,
Can I can I.

Speaker 7 (12:32):
Say one more thing?

Speaker 2 (12:33):
Sure?

Speaker 7 (12:34):
I think where it's going to get a lot of
people in trouble is it's gonna it's going to let
someone think that they can afford a three quarter of
a million or million dollar house because their payments are
you know, five hundred bucks a month or whatever it
might be.

Speaker 8 (12:47):
Yeah, So I.

Speaker 7 (12:48):
Think that that's going to be a huge factor. And
you know, it's it's just because you can make the
payments doesn't mean you can't afford the.

Speaker 9 (12:55):
House, you know, no doubt.

Speaker 1 (12:58):
One hundred percent, and I appreciate the call. Cody, thanks
for listening to us today.

Speaker 7 (13:01):
Thank you.

Speaker 1 (13:03):
I don't I mean did to me you start thinking
about it, one hundred and fifty dollars is not enough
for you to just like adamantly want to just not like,
why would you not do that to me?

Speaker 10 (13:16):
Right?

Speaker 1 (13:16):
Like, oh, one hundred fifty dollars, I can find a
way to budget for that. Doc's on the phone line
four two, five, five, eight, eleven ten, Welcome Doc. What
do you say about this?

Speaker 8 (13:25):
Well, you know, I have to agree with some of
what Cody said there in terms of you know, as
you have your mortgage over a period of years and
your disposable income increases, you can start adding to your
mortgage payment and pay down the principle. But on the
other hand, most people do not take a thirty year

(13:47):
mortgage and live in that house for thirty years, right,
They just don't, you know, Five ten years later, their
income increases, they decide that they want to move into
a bigger or different house or different neighborhood, and they
pay off, you know, the more you just paid off
with the principle of the house. Because over time it's

(14:09):
appreciated and they probably still end up with some cash
toward of down payment on a new house. That's how
most people.

Speaker 2 (14:15):
Work, for sure.

Speaker 11 (14:17):
And I don't know anybody that has lived in a
house for thirty years, with the exception of maybe you
know some older people.

Speaker 12 (14:25):
Right, yeah, I mean most younger people.

Speaker 11 (14:28):
Most younger people are bailing out of a mortgage within
five to ten years.

Speaker 2 (14:32):
Well, and for different reasons, right for another house, yeah.

Speaker 1 (14:34):
Docutor, for different reasons, whether you need a bigger house,
or you're wanting to you know, maybe even downsize, or
maybe you're trying to get a different job and you
have to move. I mean, that was my situation. I
liked the house that we were in, and I liked
the neighborhood that we lived in. But then I got
the opportunity to come to Omaha.

Speaker 2 (14:49):
I didn't have a choice.

Speaker 1 (14:50):
I had to put that thing back on the market,
regardless of what the market said. I kind of had
to rush through it. And if I wanted to rent,
that was one thing. But I didn't want to go
back to renting. I would have liked to buy a
house that I got lucky enough to buy a house
here in Omaha, but the rates were insanely high compared
to what I bought in during the pandemic, So it
is quite interesting to hear the differences between all of that.

(15:14):
And you're one hundred percent right. I couldn't tell you
a person that lived like all of the previous owners
of my house, and my house has been around since
the nineteen fifties, nobody lived in that thing for more
than a decade.

Speaker 2 (15:26):
Just because it's.

Speaker 11 (15:27):
Exactly my point. Yeah, I think another issue to take
into account is in Europe. You know, it depends on
which country you're in, but you know, forty and fifty
year mortgages are not uncommon. Yeah, well not uncommon, and
that fact in Spain and France they even have sixty
year mortgages.

Speaker 1 (15:48):
That's so crazy to me, But maybe that's one of
the reasons why we're talking about it here now, even
if it may not be the best idea on paper,
it's just because other people do it. Doc, good stuff,
Thanks for the call today, Take care all right, if
you want to call us, you can four two, five, five,
eight to eleven ten.

Speaker 2 (16:03):
And what was this?

Speaker 1 (16:04):
What will this do to the big rental properties? So
you know, if all of a sudden people can get
a few hundred dollars knocked off because they're, you know,
doing a fifty year mortgage. Would there be any reason
for them to rant anymore? Mark, what's on your mind?

Speaker 11 (16:16):
Oh? I was just calling.

Speaker 13 (16:17):
I've noticed that nobody's mentioned taxes yet. My question is
is what.

Speaker 8 (16:25):
Happens when they do this?

Speaker 13 (16:27):
It'd be just like the car market.

Speaker 8 (16:29):
Okay, people can finance for.

Speaker 13 (16:30):
Eight years, ten years now, they can just raise raise
the values. What happens to the assessed tax value of
these homes when when the local jurisdictions and states find
out about these fifty years, it's it's going to go
out of control. And not only are these new people
that can buy a home going to lose theirs, but
everybody else who already has one won't be able to

(16:54):
afford it anymore. And I just that's where I'm looking
at it. It's a great idea, it could be a
short term fix for the economy, but ultimately I think
it's a death sentence.

Speaker 1 (17:07):
Yeah, it's interesting that you bring up how it could
affect people who've already bought their house, right, so you
know just how all of that could end up feeding
into each other. And we talk about affordable housing and
trying to resolve that issue. There are so many great
apartment places for low income and middle income, you know,

(17:28):
housing for people in a lot of different places, but
nobody wants to live in some of the places that
are super duper cheap for whatever reason. And I get
that not everything is perfect, but for people who financially
don't have great credit, or people who financially can't afford
giant bills, or the responsibility it would take to have

(17:49):
responsibly a home, are we really trying to tell them that, hey,
it's okay, we'll make a fifty year mortgage for you
so you can get a home anyway. It just seems
like the wrong direction to be going right now.

Speaker 13 (18:01):
It's absolutely wrong.

Speaker 7 (18:03):
It's it's a you.

Speaker 13 (18:05):
Can't do this, so let's change the numbers a little
bit so that you can. It's the same as some
of these school districts like, oh, we don't have as
many a's as we did, you know in the last
three years. Hang on, instead of actually fixing the problem,
let's just lower the bar a little bit for an
A And now all of a sudden, we have a
whole bunch of more a's and we're a great school yep, yep,

(18:27):
and yeah, just the problem instead of fix it's.

Speaker 1 (18:31):
A it's a great that's a great example. Mark where
you're taught you're you're basically exactly what you're doing is
you're just kind of changing the scale and with the
hopes of creating, you know, a resolution to something right now.
But you get six or seven years into a fifty
year mortgage, you might be thinking to yourself, so, how
much longer am I gonna have to pay this thing?

(18:51):
Assuming you're still living in that house. I just don't
see the positive of it. I appreciate the call, buddy,
thanks for listening to us and for calling.

Speaker 13 (18:58):
It God bless America.

Speaker 1 (19:00):
Yeah, yeah, he's right, that's that's what you should say too.
I did see this. According to Redfinn, thirty nine percent
of a typical homeowner thirty nine percent of their income
is on housing thirty nine percent. Now, I would have
to look at my numbers. I haven't done my pie

(19:22):
that way, where I look at exactly on a month
to month basis where most of my money goes. I
can tell you that I'm not paying a whole lot
more than what the minimum is. I have lived in
the house for just over two years now, love the house,
love the neighborhood. We definitely need to refinance when we
get a little bit further down in the interest rates,

(19:43):
because when we had to buy a couple of years
ago is insane.

Speaker 2 (19:47):
It was crazy.

Speaker 1 (19:48):
I went from having like two percent and now all
of a sudden they were talking like eight and a
half percent in years, Like, oh, there's a bit I'm comment,
you know, like I just it was difficult. I couldn't
figure out what to do. But you know, this is
why you get good people in your corner when you're
buying a home, because then they can tell you, Okay,
this is what we're going to do, this, how we're
going to rework things. We just have to make sure

(20:10):
within the next handful of years we refinance, and so
we're knocking on getting close to halfway through that, and
at some point we're just going to have to do
that and hopefully save ourselves as much money as we can.
Thirty nine percent of your income on housing for a
typical homeowner. According to Redfinn, the affordability threshold recommended by
financial experts is thirty If you're going to live prosperously,

(20:35):
you need thirty percent on average, So what does that
look like? How do you get how do you knock
off ten percent of the average percentage of people's Like,
this just seems like a thing that's an impossible thing
to do. You're basically having to rework or rewire the
entire system to make all of a sudden, a thirty

(20:56):
nine percent amount like an affordable number by stretching it
out a little further and instead of it being a
thirty nine percent, it could be thirty five percent. Maybe
we'll take more calls. I want to hear your thoughts
on this. I've only bought a house twice. It can

(21:18):
be a stressful thing. It could be a lot of
fun if you're you know what you're doing. A lot
of people do a lot more than just you know,
they flip houses, They do all sorts of stuff. I
know a lot of people in real estate. If you
are in the know, I'd love to hear your opinion
on this, because it certainly just sounds like a bad
idea to me. But how about a fifty year mortgage?
Donald Trump, some of his guys in the administration say

(21:39):
we're working toward making that an option, as if it's
going to help resolve maybe it will at least temporarily
resolve a housing situation in the United States. It is
less than ideal, and we're talking about it today whether
or not this is a good idea or not. Four
h two, five, five, eight, eleven ten is the number
that you can call today. Doug is on the phone line. Doug,

(22:00):
welcome to our show today. What's on your mind?

Speaker 11 (22:03):
Hie.

Speaker 5 (22:04):
I have to say, I think from just a thing
and looking at the idea is actually bad for fifty
year note. However, I think you could understand why it
sounds good to some people, and maybe for some people
if they would refinance, I mean, get a fifty year
note and then refinance it a few years, it might
make some sense.

Speaker 11 (22:21):
But however, I.

Speaker 5 (22:22):
Think the biggest issue here is this is an example,
and yet another thing is that Donald Trump puts out
to kind of test the waters. I think he's looking
to see the reaction of people, and perhaps that is
where it's really lies. It may not be a serious proposal.
It may just be a way of finally getting a
public read on what people think about trying to exchange
the interesting situation and really high realistic crisis and high

(22:44):
finance do it.

Speaker 1 (22:45):
Yeah, I mean, I can't rule that. I think, Doug,
that's a that's realistic. This would be would not be
the first time that Donald Trump's also kind of floated
an idea out informally to kind of get a read
on how people are reacting to it. I just can't
imagine there's going to be a lot of people that
are you know, in Congress, or people who are experts

(23:06):
in finance that would say, yeah, this is something we
should we should go after. And I would be surprised
if we got to a more formal situation on this.
But he's mentioned it a couple times this weekend and
then today also just kind of reiterating this is something
they're looking into. But it is fascinating that this would
even be on the table as an option. I do
think that you're right, Doug. This could also just be

(23:28):
kind of testing the waters and seeing how people are
responding to it.

Speaker 2 (23:31):
So appreciate the call man, Thanks for listening to us.

Speaker 11 (23:35):
Right.

Speaker 1 (23:36):
Pat's on the phone line four two, five, five eight
eleven ten. Pat, Welcome to eleven ten kfab.

Speaker 4 (23:42):
Hey.

Speaker 14 (23:43):
My question are my comment here is I think this
is almost a situation that's deeper than just about money.
It's about people who are used to getting what they
want when they want right now. Expectations are totally different
with next year generation people that think, yeah, you know,
I really think it's deeper than just money. And I

(24:06):
think it's it's it's longer that you know, kids don't
even have an idea anymore about you know, credit cards.
They just go spend, spend, spend, spend. Yeah, and I
think that's going to make it even worse, yeah than
it is by going to fifty year mortgage, I think,
and yeah, oh yeah, I can have this million dollar house.
It could me look at me. But I think it's
a deeper than just a money thing.

Speaker 5 (24:27):
Honestly.

Speaker 1 (24:29):
Yeah, So I think you're onto something with the I
want now to work for me, because I mean, especially
with me, I didn't I didn't grow up in a
house I had a lot of money. We didn't have
a lot of you know, extravagant purchases or anything like that.
And it took me a little bit of experimenting with
the little money I had when I was getting my

(24:50):
first jobs to know what I needed to save to
be able to make my life work. But you need
to ask for help or to get advice and to
help get the advice of you know, whether it's your
parents or your teachers, or when you get out of
you know, maybe even like an employer or CPAs, stuff
like that, of what is the right move for me?

(25:11):
But this would be my fear, pat is that, and
I mentioned this last hour, is if we kind of
have these shortcuts of you know, hey, we're you could
actually save a little bit of money off the top
of your monthly payment every month. If we go to
a fifty year mortgage, that's not going to make normal
housing more affordable for people who generally wouldn't afford it

(25:32):
and want to own a house. These are people who
probably could afford a lower priced house. You know, they
could afford a three hundred thousand dollar house, but instead
now they're going to go for the five hundred thousand
dollar house with the idea that well, I'm still gonna
have three hundred dollars less off of the top of
my mortgage payment because of a fifty year mortgage. And

(25:56):
so now all of a sudden, the incentive fixing the problem,
you're gonna have a bunch of people who probably shouldn't
even be looking at five hundred thousand dollar houses, thinking
making a ford to five hundred thousand dollars house and
then be stuck in that debt for fifty years or
you know, not be able to properly manage that money
when they resell the house inevitably in the next five
or six years.

Speaker 2 (26:16):
So it's and.

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A whole philosophy of people is you know, I live
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Speaker 1 (26:26):
That is bad advice. Yeah, yeah, it's one hundred percent true.
Pat good stuff today. Thanks for calling in today. We
got a few more calls coming in. We'll take more calls.
If you have some thoughts on a fifty year mortgage,
call me at four h two five five eight eleven ten.
You're listening to news Radio eleven ten kfab.

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Speaker 1 (32:17):
All right, live here with you at for Happy Monday
to you. We're talking about a fifty year mortgage. Sounds
like a made up thing. It's not a made up thing.
It's something that has actually been talked about. Donald Trump
and people in his administration have floated the idea publicly
to help the housing affordability crisis in this country, to

(32:39):
introduce an option of a fifty year mortgage. Now, I
don't know exactly what has to be done to make
this an actual thing, but I don't know how good
of an idea this would be to solve the problem
at all. For anyone, Phone lines are open. I can
get your thoughts on this. Four two, five, five, eight
eleven ten. Joy is on the phone line. Welcome, enjoy,
what's on your mind?

Speaker 2 (32:58):
Today.

Speaker 27 (33:00):
Hi, Well, one thing that I haven't heard of they
talked about, and if they did, I might have missed
a fifty year mortgage. And how fifty years? Not everybody's
going to live that long. If you're thirty or thirty five,
then you get a fifty year mortgage, and I guess,
I guess that there always my pen sure us attached

(33:22):
to the mortgage.

Speaker 12 (33:23):
So we're long.

Speaker 1 (33:28):
Yeah, we're picking you up and losing you a little
bit joy. But I get what you're saying, and I
appreciate the call today. I think what her bigger point
was is the the concept of a fifty year mortgage,
even if you tried to live in a place for
that long, would like, what's the the lifespan of I mean,

(33:54):
so let's say the mortgage i'll lives you, and what
happens and how often that could potentially have happen if
we started just granting fifty year mortgages to people left
and right, and they still would owe however much money
I know that goes to, like the estate, I know
that could potentially go through, And she was mentioning kind
of life insurance and how that could help cover some

(34:16):
of that. I'll be completely honest with you. That's just
another layer of a problem that you would have to
resolve more frequently, you would think with a fifty year
mortgage situation than we do with the twenty or the
thirty year mortgages. But this is what happens when the

(34:36):
prices of houses are going from where they were fifty
years ago, where it felt like people who were on
regular budgets could afford a house pretty regularly and still
have the opportunity to maybe make a buck on it
a little bit later. And now, all of a sudden,
even if you're making pretty good money to get a
nice house, you're going to really have to break the bank.

(34:59):
My on the phone line at four oh two, five, five, eight,
eleven ten, Welcome in, Mike. What's on your mind today?

Speaker 13 (35:06):
Well, I think they're trying to follow suit of the
automobile world. That we'll say, like the car dealerships, you
buy a new car used to be a maximum four
year loan. Now I think at a dealership you can
go six seven year loan, which sounds just crazy. Yeah,
fifty year loan on a house is I agree, it's

(35:27):
just crazy. However, the entry level person, the newly weds
trying to start out and buy a house at the
beginning of their of their life is terrible right now,
and maybe this will allow them to get in once
they both get the two jobs and they can start
making double payments and pay it down right away. Maybe
that's what they're looking at.

Speaker 1 (35:47):
Yeah, sure, yeah, I guess then the reaction to that
would be, what does this do to the rental market?
Does this make rental prices? Because I mean, there's all
sorts of great rental properties that you can, you know,
rent of play, and some of those are pretty expensive.
Some of those are a bit more reasonable and affordable,
but they'll take care of all the stuff that you need.
And I don't think those are bad. I know that

(36:08):
you're told that you should buy as soon as you
can because that's going to be an asset for you
in the future. But you know, what does that do
to rental prices? Do rent prices have to go down
a little bit to compete with a fifty year mortgage
for these twenty five year olds who are just trying
to get going in their life.

Speaker 2 (36:23):
I mean that's possible, right If.

Speaker 13 (36:26):
That sounds yeah, that sounds fair. I agree that puts
the play on those guys and make it competitive. That
the way they keep the market going.

Speaker 1 (36:36):
Yeah, for sure appreciate the call, Mike, thanks for listening
to us today. Just as an appendage to that thought.
If that's what you're attempting to achieve, is to kind
of regulate and make it more competitive for people who
are renting it versus people who are buying and have
that price be competitive. And the only way that you

(36:58):
think you can do that for a nice home is
by adding in the option of a fifty year mortgage,
which would save you a couple hundred dollars a month maybe,
but just put you on the hook for more down
the line later and a lot more money overall as
time goes on. But if it does help regulate and

(37:21):
rental properties have to respond also by lowering their prices
to match what the fifty year mortgage rates might be
for a typical house of whatever value they're looking at. Well,
in that situation, you might be thinking to yourself, maybe
this isn't a terrible idea. You would just really want
to educate the young people who might be entering fifty

(37:41):
year mortgages that once you start making more money as
time goes on, it behooves you to adjust your payment
plan and try to knock off as many payments and
add as much money as you can. Look to refinance.
If you have too high of an interest rate, you
can't just like set your fifty year mortgage rate and

(38:01):
just let it go. You really like though, the only
reason this makes sense is that you would be able
to pay more money as you make more money. And
hopefully they're getting that advice. Dave's on a phone line.
Will take Dave's call here today. Dave, welcome to eleven
ten KFAB. What's on your mind?

Speaker 4 (38:19):
Heye, you're just now starting to talk about what I
was thinking. How can you make it to your advantage?
And I do think it is for younger people like
you and your age and stuff. And let's say you're
in the two fifty to three hundred and fifty thousand
dollars range that you could afford on a thirty year mortgage.
But and you're reasonable and you buy a three hundred
thousand dollars house, you take the fifty year mortgage the principle,

(38:43):
and the principle is going to be much cheaper because
the interest comes out first. You double pay the interest
or the double pay the principle, you double pay on
the principle, and you know you're probably not going to
stay there forever anyway, but you know you could put
and even if you did stay their whole fifty and
you double paid the principle, you're going to get it

(39:04):
down to twenty five, you know. And if you put
a little extra on it, like you just talked about, yeah,
and stuff like that, and it could get you in
the door.

Speaker 1 (39:12):
So yeah, And I think that that's worthy if they're
getting the right advice, and then they can you know,
they don't look at it as I have fifty years
to pay this off. They're looking at it as like
I just need to get started with a more affordable
monthly payment.

Speaker 12 (39:25):
And more affordable right, yeah, and then we do.

Speaker 4 (39:28):
And don't let it say if I do fit yet,
well I could jump to four twenty five exactly.

Speaker 1 (39:32):
And I think that is what my fear would be
for a lot of younger people to say, oh, well,
that just makes it like my range grows. I have
the ability to get a more expensive home because my
monthly payment will be cheaper. But if you get of
how it is already affordable and then you like, hey,
as I make more money in my job in three
or five years or whatever, then we can start adding
more money to our payment.

Speaker 4 (39:53):
More money.

Speaker 2 (39:54):
It makes sense.

Speaker 4 (39:55):
Don't forget interest comes first. Principle is really tiny at
the beginning. I can double the principle taking away another payment.

Speaker 1 (40:02):
Yeah, that's good stuff, Dave. Really do appreciate you for
being on the show today. All right, bye, Frank, thanks
for holding what's on your mind today?

Speaker 12 (40:11):
Yeah, thanks for taking my call. You know, I don't
even know the answer to this, but but I can't
imagine that seventy five years ago that they were putting
out thirty year loans for fifteen thousand dollars houses, and
then somewhere along the line they extended this to thirty
year loans. And you know, I'm just saying I can't.

(40:35):
I couldn't imagine taking a fifty year loan out on anything.
And maybe this is just a step that we can't
imagine because it's never been there before.

Speaker 1 (40:45):
Yeah, that's a really good point, you know, And I
know there's a way that we can find out exactly
what the theory on this is. But this is the
kind of thing that we talk about when you even
talk about like the nineteen seventies, and how different the
value is of the dollar. You know, they'll say, well,
a ten thousand dollars job in nineteen seventy one is

(41:06):
equal to like a thirty two thousand dollars job.

Speaker 7 (41:08):
Now.

Speaker 2 (41:08):
I just made those numbers up. I don't know if
that's accurate, but.

Speaker 1 (41:11):
It really tells you just how much the value of
things have changed and just how much more expensive things
have gotten based solely on the market that we have.
I don't know what the answer is either, Frank. It's
a really good question as to whether or not we
have kind of jumped the shark on it, and there's
really no turning back to what we had before. And
the idea of a fifty year mortgage just seems like

(41:33):
another step the wrong direction here.

Speaker 12 (41:37):
Yeah. I thought the same thing probably ten or fifteen
years ago, when they start putting fifteen year loans available
for boats, and that to means just nuts. But now
it's an everyday deal. Nobody thinks anything of it.

Speaker 1 (41:54):
I appreciate the call of Frank. It's good stuff. Thanks
for listening to us and for calling in today.

Speaker 12 (42:00):
Thank you.

Speaker 1 (42:00):
Let's go to Mark on the phone line four h
two five five eight to eleven ten, Mark, what's on
your mind today?

Speaker 2 (42:08):
Mark? Are you with me?

Speaker 1 (42:11):
Let's jump to Sherry real quick, and then we'll come
back to Mark, because there's the chance that Mark, uh
just just hit Schary, just hit Cherry's button.

Speaker 2 (42:17):
Yeah, there you go. Hey, Sherry, how are you doing today?

Speaker 3 (42:20):
I'm good, Thanks for taking my call. I've got two points.
First of all, the last caller made some good points.
Think about the value of a dollar back in the
thirties and forties versus the value of a dollar today,
and how everything is is bat called the north if
you will. Also, the second point is, what is the

(42:41):
percentage of people who buy a house and stand that
house near entire life? I think that's pretty pretty low.
Oh yeah, because most people buy us charter homes and
then they you know, they work hard, they're growing, their
their finances are growing, they sell the house, they buy
a little house. I don't see anybody sitting in the

(43:03):
house for fifty years, So I think that that is
just a moot point. It's a way for people to
get into young couples, to get into a house that
they normally couldn't afford. And banks and mortgage companies are
pretty good at scrutinizing total income versus debt before they
ever allow anyone into that, you know, to buy that home.

Speaker 2 (43:25):
Yeah.

Speaker 3 (43:25):
So I think there's a lot of fear going on
of the unknown as the least, you know, as the
last foller said fifteen year boat loans, for example.

Speaker 28 (43:34):
But I don't think it's anything that we need to
get so crazed about because I don't see anybody even
a fifty year mortgage.

Speaker 1 (43:46):
It's a good point, and I don't know if there's
a like a perfect answer to it, Sherry, But what
I do know is that affordability and housing affordability is
a top of mind saying for a lot of people.
And I know, with the midterms of twenty twenty six
coming around, just floating ideas and trying to figure out

(44:06):
ways to correct this. You're hearing about zoronmm Donnie trying
to freeze ramp prices in New York City as part
of his you know, democratic socialism. Yeah, but I mean
like that, that's that's his answer. And now you're hearing
get kind of the other end of that, the Trump
administration saying maybe a fifty year mortgage is the right
thing for us to be able to accomplish this.

Speaker 8 (44:26):
So well, every one.

Speaker 3 (44:28):
Last thing. Think about Think about when they first announced it,
thirty year mortgage. Can you imagine how people were up
in arms then because it was something nobody because back
in the day, you paid off your dad as fast
as you possibly could. Never would you ever think you
were going to have a thirty year mortgage anyway. Just
stuff to chew on and ponder, and.

Speaker 1 (44:49):
Yeah, for sure, talk about I appreciate it, Sherry, absolutely,
you have a great rest of your day. Let's jump
to Bruce on the phone line at four two, five, five,
eight eleven ten. Bruce, Welcome to the show today. What's
on your mine?

Speaker 29 (45:01):
Oh well, I just wanted to make a point. I
think that I've been listening and there's a lot of
good points brought up. But just I bought a home
in Nebraska ten years ago and a built one and
it cost me three hundred thousand. Ten years later, this
house is worth six hundred and fifty thousand dollars. Yeah,
and they can't afford it now. The thing about the

(45:21):
fifty year more reason. I just I heard about your
show driving home. I didn't put a pencil to it.
But the thing about buying something, you lock in that price.
So if we continue to have homes go up six
and a half percent a year average in this area,
doesn't take very long where you can't save enough to
catch up with it. But if you buy it, you
lock it in.

Speaker 1 (45:43):
Yeah, And that's a really good point there too. Also
because when you sign a lease, whether it's a lease
for you know, a rental property for six months or
for two years or whatever, as soon as that lease
is up, I mean, you're not locked into that price
and they can change it to whatever.

Speaker 2 (45:59):
Yet after that and when.

Speaker 29 (46:00):
You at leash, you're paying for somebody else's home. Just
a minute, I got to turn off this.

Speaker 2 (46:05):
Buzzerah, no problem, no problem.

Speaker 1 (46:07):
But that's the other thing, Bruce, that I think is
important for us to note, like you said, is where
we came from.

Speaker 29 (46:13):
And go ahead, and when you buy a home, you
can deduct the antor she can deduct those things, where
when you rent, none of us deduct the ball in
your taxes. So all that's an expense. So I'm just
throwing that out some people. Maybe it could help afford
it to buy it as a first time buyer or something.
I don't know, but rocking in the price is one thing.

(46:34):
If it continues to get to go up and up
and up, they never will be able to buy one
Brusko stuff.

Speaker 1 (46:41):
Really appreciate it. Thank you so much, you bet, Steve.
Welcome to the show today. What's on your mind?

Speaker 29 (46:46):
Hey, I'm ri Thanks.

Speaker 30 (46:48):
You know the guy earlier who was talking about a
fifteen year mortgage as a standard at one point in time,
I'm mnsa feel a little bit younger than Tim, but
is so thirty is the norm that I've been used to.
But you know it's to me all of this is
in favor of the finance company. All right, car loans

(47:10):
my experience, that used to be three four years at
the most, and now I hear of like six, probably
more now for auto loans. And you got to figure when,
when you're looking at paying the taxes and the principle
and all that that goes into to a mortgage or
a car loan, all of the interest or the majority

(47:35):
of the payment is going towards interest, and it slowly
switches over until finally at the very end, you're paying
more of the principle than the interest. And what that
means is if you've got a fifty year loan, fifty
year mortgage, and you change after thirty years. You really

(47:56):
haven't touched the principle much at all.

Speaker 1 (47:58):
Yeah, it's a good point, is Ryan money, and I
think it's reminding a lot of people this discussion that
we need to be looking at exactly what that payment
looks like every month to make sure that we're doing
this the right way.

Speaker 2 (48:07):
Steve, it's good stuff. Really appreciate the call.

Speaker 30 (48:08):
Today, you bet, take care of all right.

Speaker 1 (48:11):
We'll take Joe here on a phone line at four
oh two, five five, eight eleven ten. Welcome in, Joe.
What's on your mind today?

Speaker 2 (48:21):
Do we have Joe?

Speaker 11 (48:21):
Joe?

Speaker 2 (48:22):
Are you there?

Speaker 1 (48:24):
That's the second time that line has a head of snafu.
We'll call back in Joe if you hear us. But yeah,
sometimes it works. Sometimes we have little little hang ups.
But we do appreciate everybody for calling in today. You know,
we talk about this and I guess this will be
the final word for now about it, and we'll see
if anything happens. You know, we got some other people

(48:45):
who are important that like the Federal Housing Finance Agency
Director Bill Polti said this week, and that it could
be a game changer and could be like a realistic
good solution to help resolve the affordability crisis with housing.
I just hope that it's not going to be an
abused situation for any given reason, that all of a sudden,

(49:10):
younger people who probably should be getting a more affordable
house or a cheaper house has the opportunity to do this.
From a perspective of, can I save a couple hundred
dollars a month for now, and then as my wages
increase and as I make more money and I manage
my money better, can I exceed possible expectations on this

(49:32):
by paying more money as I make more money. Would
be kind of where I would go on this. Joe
has called us back. Joe, appreciate you for hanging with
us today. What's going on?

Speaker 11 (49:42):
Oh?

Speaker 13 (49:43):
Hi, every how you doing do pretty good?

Speaker 2 (49:44):
What's on your mind?

Speaker 11 (49:46):
Good?

Speaker 6 (49:46):
Good?

Speaker 29 (49:47):
Hey.

Speaker 31 (49:47):
I was in the mortgage banking world for a lot,
many many years, and I guess the one thing I
noticed that no one's really talked about is as you
you know, fifty year mortgage, Like the caller said before,
that you're your principle is not really moving on that house? Well,
everybody's under the assumption that house market's going to continue
to increase back in use seven and eight was That's

(50:10):
exactly what happened. We were lending one hundred and twenty
one hundred and thirty percent equity on homes, and as
soon as the market turned, everybody's like, oh boy, my
house is wid a lot less than what I owe.
I'm stuck. And they would bring the keys to the
bank and say, here you go. I got no options.
I can't sell it.

Speaker 13 (50:29):
I'm in dad.

Speaker 31 (50:30):
So you're on a fifty year loan. And this mortgage
market turns a little bit, the housing market, you're going
to be underwater pretty fast.

Speaker 1 (50:39):
That's a really good point, Joe, and I do appreciate
you for calling in today. Thank you so much for
being a part of the show. That's a good point too.
It's something to keep an eye on. It might be
an immediate fix for now, but long term, is it
a good fix. I'm not so sure.